Does environmental regulation promote the upgrading of industrial structure? Evidence from the Yangtze River economic belt in China

This paper examines the impact of environmental regulation on regional industrial structure in the Yangtze River Economic Zone of China. We show that the environmental regulation imposes a single-threshold dampening effect on the upgrading of industrial structure. Specifically, the dampening effect decreases significantly after regulation intensity crosses the threshold. In addition, there exists spatial heterogeneity in the relationship between environmental regulation and the industrial structure upgrading across the region. In the lower reaches of the Yangtze River Economic Zone, environmental regulation imposes a single-threshold positive impact on the regional industrial structure upgrading, which is further strengthened when the environmental regulation intensity passes the threshold. On the contrary, there is a single negative relationship between environmental regulation and industrial structure upgrading in the upper and middle reaches of the Yangtze River. Therefore, when imposing environmental regulations, differential strategies across regions and industries should be adopted considering regional differences.