Does ecological compensation have a spillover effect on industrial structure upgrading? Evidence from China based on a multi-stage dynamic DID approach

Information and communication technology, upgrading of industrial structure and spatial spillover effect

Against the backdrop of China's "dual-carbon" goals and regional coordination strategies, information and communication technology (ICT) is positioned as a critical enabler to resolve efficiency-resource trade-offs and bridge spatial development gaps. This paper investigates the impact of ICT on the industrial structure upgrading (ISU) process using the Spatial Dubin Model (SDM). Based on the panel data of cities in the Yangtze River Delta region of China from 2001 to 2023, the empirical results indicate that ICT has a positive effect on ISU and that there are significant positive spatial spillover effects. Technological innovation and productivity improvement play essential mediating roles during this process. We also find that ICT has a greater impact on the cities in the early stages of industrial upgrading than on those in the developed stages. These findings offer actionable insights for policymakers to leverage ICT's cross-regional synergies, particularly in emerging economies grappling with imbalanced industrial ecosystems and sustainability constraints.

Research on two-way ecological compensation strategy for transboundary watershed based on differential game

Water pollution control in transboundary watersheds can improve the water environment quality, alleviate water resource conflicts, and is an important guarantee for achieving healthy and stable development of watersheds. Ecological compensation is an important measure to solve the problem of water pollution in transboundary watersheds and has been widely applied in China. We constructed differential game models for water pollution control in transboundary watersheds under four scenarios: (1) no ecological compensation scenario, (2) upstream one-way ecological compensation scenario, (3) downstream one-way ecological compensation scenario, and (4) upstream and downstream two-way ecological compensation scenario. We studied the optimal water pollution control strategies and ecological compensation strategies under different scenarios, and compared the results obtained under different scenarios to explore which scenario has better water pollution control and ecological compensation, as well as the applicable conditions for different one-way ecological compensation. The results indicate that both upstream and downstream one-way ecological compensation can promote water pollution control, and the optimal one-way ecological compensation should be determined based on the cost and benefit parameters of upstream and downstream water pollution control. The upstream and downstream two-way ecological compensation can reduce the pollutant reduction furthest and improve the social welfare extremely, making it the best ecological compensation. Finally, it is necessary to actively promote the formation of two-way ecological compensation in the upstream and downstream of transboundary watersheds to achieve long-term sustainable development of the watershed.

A study on the quantification and impact mechanism of regional ecological compensation based on revised carbon accounts: evidence from the Yellow River Basin economic zone in China

With the progression of regional connectivity, attaining the 'dual-carbon target' is no longer the narrative of a single city. To achieve synergistic governance among cities in the basin economic zone, it is essential to establish a multidimensional ecological compensation mechanism. This research amended the conventional carbon accounting model by utilising carbon emissions and economic data from 59 cities in China's Yellow River Basin, covering the period from 2004 to 2021, after the timeframe of significant alterations in the administrative divisions of cities was removed. It additionally compares and analyses the clustering patterns and trajectories of centre-of-gravity shifts in regional ecocompensation credits while investigating the impact processes through geo-probes. The findings indicate that the amended carbon account has a more decentralised distribution when interregional disparities are considered. Second, ecocompensation credits are characterised mostly by low-high and low-low agglomeration; nevertheless, their regional distribution is uneven. Moreover, the rankings of the top five cities in terms of ecocompensation exhibited minimal variation each year. The degree of green technology is the primary determinant of the spatiotemporal evolution of ecological compensation. The conclusions of this study can serve as a valuable reference for the execution of medium- and long-term ecocompensation policies and aid in attaining the 'dual-carbon' aim.

Collaborative management of environmental pollution and carbon emissions drives local green growth: An analysis based on spatial effects

Collaborative management of environmental pollution and carbon emissions (CMPC) has been a major policy instrument to promote Sustainable Development Goals (SDG) in recent years. However, the relationship between the benefits and drawbacks of this environmental management practice for green growth in and around a local area remains to be clarified. Using 30 provinces in China during 2001-2019 as the object of analysis, we assessed the efficiency of local CMPC practices using the nonradial directional distance function (NDDF) model, predicted local green growth using the frontier green complexity index (GCI), and empirically examined the spatial effects, locational heterogeneity, and threshold characteristics of the relationship using the spatial Durbin model and the panel threshold model. Our study finds that although efficient CMPC does drive local green growth, the promotion effect is nonlinear with decreasing marginal effect. This effect is particularly obvious in economically developed regions with higher CMPCs, which will absorb resources from neighboring regions and create a "siphoning" effect. It was found that local financial support and foreign direct investment (FDI) can radiate green growth to neighboring regions; therefore, CMPC practice needs to pay more attention to the effect of joint governance, supplemented by financial and foreign investment policy tools, to better promote the green transformation of local economy.

How does payment for watershed ecosystem services alleviate farmer poverty in conservation intervention areas? Evidence from China

Payment for watershed ecosystem services (PES) has been applied to water conservation and poverty reduction in an increasing number of developing countries. This study evaluates the effect of payment for watershed ecosystem services on farmers' income in conservation intervention areas using a difference-in-differences model and a panel dataset that covers 18 countries in the Xin'an River Basin in China for fourteen consecutive years (2006-2019). The results show that PES programs increase farmers' income and that the poverty reduction effect is sustainable. The PES programs mainly increase the farmers' income in conservation intervention areas through two paths: triggering the transfer of agricultural labor and promoting agricultural restructuring. PES programs are pro-poor and more conducive to increasing the income of farmers in upstream regions and counties with lower levels of economic development. This paper reveals the specific role played by PES in promoting rural poverty reduction in developing countries, providing insights into alleviating the contradiction between poverty and watershed ecosystem protection.

Does marine ecological compensation policy have improved marine carbon emission efficiency? Evidence from coastal areas in China

The marine ecological compensation (MEC) policy is a scheme for protecting and restoring marine ecology. The previous studies have verified that the policy has improved the marine environment, ignoring the comprehensive performance of the economy and environment. Is the MEC policy actually effective for reducing marine carbon emission considering resource input and economy output? To address the question, this paper evaluates the impact of MEC policy on marine carbon emission efficiency by introducing the multi-stage difference-in-difference with propensity score matching. The results show that the MEC policy significantly improves marine carbon emission efficiency, and the positive effects dynamically enhance over time. Low-carbon technology innovation is confirmed to play a mediating role by which the MEC policy improves marine carbon emission efficiency. Therefore, gradually popularizing the MEC policy and accelerating low-carbon technology innovation are crucial measures to improve marine carbon emission efficiency and achieve sustainable marine development.

Research on provincial water resources carrying capacity and coordinated development in China based on combined weighting TOPSIS model

With the continuous development of the economy and society, along with the sustained population growth, the issue of water resources carrying capacity in China has attracted increasing attention. This paper constructs a model for evaluating the provincial water resources carrying capacity in China from four dimensions: water, economy, society, and ecology. Utilizing this model, we analyze the spatiotemporal variations in water resources carrying capacity among 31 provinces in China from 2005 to 2021. Additionally, we delve into the coupling coordination and influencing factors of water resources carrying capacity. The study reveals an overall increasing trend in China's water resources carrying capacity index, with the ecological indicator exhibiting the most significant growth while the water resources sub-indicator lags behind. There are notable regional differences, with higher water resources carrying capacity observed in the eastern coastal areas and relatively lower capacity in the western regions. The ecological criterion becomes a core factor constraining water resources carrying capacity from 2005 to 2015, gradually giving way to the prominence of the social criterion since 2015. The coordination degree is relatively higher in the eastern regions, more scattered in the western regions, and relatively stable in the central regions. Based on the research findings, a series of recommendations are proposed, including strengthening environmental protection policies, optimizing water resources management mechanisms, improving water use efficiency, and promoting economic structural diversification. These suggestions aim to facilitate the sustainable development of water resources carrying capacity in China.

Effect of marine ecological compensation policy on coastal water pollution: Evidence from China based on a multiple period difference-in-differences approach

With the development and utilization of marine resources, coastal water pollution has become increasingly prominent. The marine ecological compensation (MEC) is a key measure to balance the utilization of marine resources and the protection of marine environment. This paper attempts to explore the governance effect of MEC policy on coastal water pollution. Based on panel data of coastal cities in China from 2006 to 2020, a multiple period difference-in-differences (DID) model is used to estimate the impact of MEC policy on coastal water pollution. The research results show that the coastal water pollution has decreased significantly in the polit cities after implementing the MEC policy. The governance effect of MEC policy on coastal water pollution will last for three year and cover areas within a geographical distance of 200 km. The transmission mechanisms of MEC policy on coastal water pollution are the reduction of land-based sewage, marine technological progress and optimization of industrial structure. Further, this paper provides operational suggestions for strengthening the governance effect of MEC policy on coastal water pollution.

Research on the dynamic mechanism of digital economy system coupling to enhance urban ecological resilience

Urban ecological environment resilience is an important characteristic that should be possessed in the process of urban development. It is conducive to coping with the challenges of multiple risks and disturbances such as climate change, resolving chronic pressure, improving the ability to resist disaster risk, self-adjustment, and recovery, to maintain the structure and function stability of the urban system. The digital economy is a new economic form caused by the new technological revolution, which may effectively promote economic ecology and ecological economization. We clarify the elements of the digital economic system, construct the coupling evaluation index system of "digital infrastructure-industrial digitization-digital industrialization," and establish the coupling degree model to analyze the characteristics of the integration interaction, coordination, and self-organization of the digital economy subsystem. Based on emergency management theory, adaptive management concept, and resilient city theory, an evaluation index system is constructed from four levels of prevention, resistance, adaptation, and recovery to measure urban ecological resilience. Taking 278 cities in China from 2011 to 2021 as the research object, we established a spatial econometric model to explore the dynamic mechanism of digital economy system composition and coupling coordination to enhance urban resilience and summarize the theoretical model form. Based on this, we further propose countermeasures and suggestions for improving urban ecological resilience by using a digital economic system.

Exploring the spatial-temporal evolution and driving mechanisms for coupling coordination between green transformation of urban construction land and industrial transformation and upgrading: a case study of the urban agglomeration in the middle reaches of the Yangtze River

With the acceleration of urbanization and industrialization, the increasingly prominent contradiction between urban industrial development and urban land supply and demand highlights the need to explore the intricate interplay between the green transformation of urban construction land (GTUCL) and industrial transformation and upgrading (ITU). This exploration carries significant practical implications for fostering the harmonious development of industry and land use and achieving sustainable urban growth. In this study, we constructed evaluation indicator systems for GTUCL and ITU, drawing on the analytical frameworks of "dominant-recessive" transformation theory and "dynamic structure benefit" theory, respectively. We employed an enhanced entropy method, an improved coupling coordination model, and a geographic detector to unveil the coupling coordination relationship, the spatiotemporal evolution patterns, and the driving mechanisms of GTUCL and ITU within the urban agglomeration of the mid-Yangtze River region. The results are as follows: (1) during the research period, the comprehensive index of ITU exhibited substantial growth, increasing from 0.159 to 0.408, reflecting a remarkable 157% surge. Simultaneously, the comprehensive index of GTUCL witnessed an increase from 0.171 to 0.285, signifying a 66.66% upswing, lagging behind that of ITU. (2) The degree of coupling coordination between ITU and GTUCL demonstrated a consistent upward trajectory. It rose from 0.402 to 0.579 by 2020, marking a significant 44.2% increase. The overall development now resides within the stage of coordinated progress, although it remains at a relatively modest level, and the pace of development has moderated somewhat. Regional disparities within the urban agglomeration consistently manifest a trend of initial reduction followed by amplification, accentuating the polarization effect of internal coupling relationships. (3) The spatial differentiation pattern centered around "Wuhan, Changsha, and Nanchang" has become increasingly pronounced. The radiation linkage model following the "core-periphery" paradigm has stabilized further. Nevertheless, the relatively loose spatial connection structure has led to a more conspicuous inadequacy in radiation impact. (4) The core driving factors have transitioned from emphasizing economic development to focusing on technological support. The composition structure has shifted from the initial stage of an "economically sensitive" driving model, which centers on economic development, to the second stage of an "ecologically sensitive" driving model, which prioritizes ecological development.

Horizontal ecological compensation mechanism and green low-carbon development in river basins: evidence from Xin'an River basin

The Basin Horizontal Ecological Compensation Mechanism (BHEC) is a significant institutional innovation in China's water environment management, aimed at achieving green, low-carbon, and high-quality development in the basin. This paper examines the current status of the spatial association network of green low-carbon development in Xin'an River basin, using social network analysis based on data from prefecture-level cities between 2006 and 2019. Using a dual difference model, the paper explores the important role of BHEC in promoting green low-carbon development from the perspectives of production and consumption and analyzes the path of BHEC's promotion of green low-carbon development in detail. The results indicate that (1) the green low-carbon development in the Xin'an River basin is universally connected in space, but this connection is uneven among the cities in the basin, presenting a network spatial structure with the central region as the core and the north and south regions approaching the core. (2) BHEC contributes to green low-carbon development, and the "two-wheel drive" of green technology progress and green technology efficiency is essential to improve green low-carbon development. (3) From the perspective of consumption affecting green low-carbon development, the positive impact of BHEC on green low-carbon development is inseparable from the synergistic guarantee of public participation. (4) From the production side of green low-carbon development, the ecological effect, structural effect, and technological effect are significant transmission factors of compensation policies affecting green low-carbon development. (5) The "blood transfusion" pilot policy is more helpful to improve green low-carbon development, and compensation policy has positive spillover effects. Finally, the paper argues that the trans-basin ecological compensation policy is expected to become a long-term mechanism to promote green low-carbon and high-quality development in the basin, providing a theoretical and practical basis for developing countries to achieve green low-carbon development through an ecological compensation system.

The green halo effect of China's OFDI: evidence from countries along the Belt and Road

The growth of China's OFDI (outward foreign direct investment) is a unique feature of the "Belt and Road" project. Does China's OFDI have a green halo effect on countries along the Belt and Road (B&R)? Is this green halo effect somehow asymmetrical? What is the underlying mechanism? This paper systematically examines how China's OFDI exerts its influence on green technology spillovers, based on 56 B&R countries' 2003-2019 panel data. This study makes three significant findings: Firstly, China's OFDI has positive asymmetric characteristics in promoting green technology spillovers to host countries mentioned, which have lower income levels and openness. Secondly, strict relative environmental regulation can act as a "pressure pool," significantly enhancing the "green halo effect"; Thirdly, China's OFDI can help host countries obtain more green technology spillovers through three channels: expanding host countries' economic scale, upgrading host countries' industrial structure, and suppressing host countries' use of non-renewable energy. These findings point the way for 56 host countries to better accessing green technology spillovers.

Has green finance optimized the industrial structure in China?

Green finance is considered a new force for the optimization of industrial structure. With the quasi-natural experiment of the green finance reform and innovation pilot zone, the impact of the green finance reform and innovation pilot zone on the optimization of industrial structure is empirically tested. The research found that: First, although green finance reform and innovation pilot zone generally improved the optimization of the industrial structure, it had an inhibitory effect on the advancement of industrial structure. Although it promoted the rationalization, it produced negative spatial spillovers; second, the green finance reform and innovation pilot zone mainly promoted the optimization of industrial structure through three paths: foreign investment, technological innovation, and infrastructure improvement; finally, provinces with large economies and good central-local relations had a stronger role in promoting industrial structure rationalization, while small economies and poor central-local relations dragged down the advancement of industrial structure. In summary, this paper finds that while green finance can contribute to the optimization of industrial structure in general, there are many aspects of it that deserve attention in more subtle ways. The conclusions enrich the research on the influencing factors of industrial structure and also provide a reference for improving the green financial system.

Does the Low-Carbon City Pilot Policy Improve the Urban Land Green Use Efficiency?-Investigation Based on Multi-Period Difference-in-Differences Model

Improving urban land green use efficiency (ULGUE) is an effective way to increase social, economic, and ecological benefits and achieve regional sustainable development goals. This study takes three batches of low-carbon pilot cities construction as a quasi-natural experiment and investigates the impact of low-carbon pilot construction on ULGUE through the multi-period difference-in-differences method and spatial Dubin difference model (SDM-DID). The results show that (1) from 2006 to 2019, ULGUE in China increased. From the aspect of space, ULGUE in China gradually decreased from west to east, showing an obviously high agglomeration phenomenon in Beijing-Tianjin-Hebei and the Pearl River Delta; (2) after the robustness test, parallel trend test, and endogenous test, it is found that the conclusion that the low-carbon pilot construction can effectively improve ULGUE is still relevant and can indirectly improve ULGUE in the local region through fund allocation, talent gathering, and industrialization; and (3) the national ULGUE has significant positive spatial correlation. The results of the SDM-DID model confirm that the low-carbon pilot policy can produce the significant spatial spillover and drive the common advance of ULGUE in neighboring regions. Therefore, the resources and environmental conditions in each city are supposed to be taken into full consideration theoretically. Furthermore, it is necessary to effectively promote the development of ULGUE by strengthening the linkage of green production factors between different cities, so as to make meaningful contributions to promoting China's overall green development.

What drives the change in China's provincial industrial carbon unlocking efficiency? Evidence from a geographically and temporally weighted regression model

In this paper, we propose the concept of carbon unlocking efficiency based on carbon lock-in. Supported by the "Techno-Institutional Complex" theory, we measure the industrial carbon unlocking efficiency (ICUE) of 30 Chinese provinces and analyze its spatial and temporal jump probabilities through spatial Markov chains, and finally identify and discuss the influencing factors through the GTWR model. We found that the ICUE of each province in China follows a decreasing distribution from east to central to west, with Shanghai, Beijing, and Guangdong having the highest ICUEs among all provinces and cities; although the overall ICUE converges to a higher level in the long run, there is still a certain predatory effect of developed regions on less developed regions in the short term, and the intensification of market competition may adversely affect the growth of ICUE in the lagging regions. The results of GTWR show that factors such as energy use efficiency, FDI, and industrial enterprise size mainly promote ICUE growth, and energy structure mainly shows negative effects on ICUE of each province, while factors such as economic efficiency, R&D intensity, ownership structure, marketization level, share of high-tech industries, and industrial upgrading show obvious spatial heterogeneity, and different regions need to adopt different policy instruments for their strengths and weaknesses. These research results have important policy guidance implications for accelerating the process of industrial carbon unlocking in each region.

Is China approaching the inflection point of the ecological Kuznets curve? Analysis based on ecosystem service value at the county level

Accounting for the ecosystem service values (ESVs) and discussing the relationship between the ESVs and economic development can help achieve sustainable ecological development. Therefore, this paper evaluates the county-level ESVs of various land types in China, and depicts the distribution of ESVs in various urban agglomerations. In addition, the nonlinear relationship between ESVs and economic development is revealed. The main findings are as follows: (1) From 2000 to 2018, the ESVs in China decreased, and the decline rate of ESVs in urban agglomerations is much higher than that of China as a whole. (2) The decline rate of ESVs in core cities is much higher than in urban agglomerations, and the decline rate of ESVs is higher in areas close to core cities and lower in areas far from core cities. (3) The ecological Kuznets curve of China has a positive "U" shape, and the ecological Kuznets curve of urban agglomerations has an "N" shape; the ecological Kuznets curve of core cities has a positive "U" shape, while the ESVs of other cities decreases monotonically with the increase of the economic level.

Empirical Study on the Influence of Urban Environmental Industrial Structure Optimization on Ecological Landscape Greening Construction

With the rapid development of the economy in China, the ecological environment problem of the city has become an important factor that restricts the development of our economy and society. People gradually realize that, while rapidly generating wealth, they have been shrouded by the shadow of environmental pollution for a long time, which makes people feel more and more frightened and thoughtful. Industry is the carrier of economic activities, so we must pay attention to the relationship between industry and the natural environment. In this case, people pay more and more attention to the study of ecological construction and bring it into the optimization of environmental industrial structure. During this period, to correctly handle the relationship between industrial structure and ecological construction, to realize the overall transformation, development and cultivation of industrial structure, is the inevitable choice to promote the healthy and sustainable development of enterprises. From the perspective of industrial structure adjustment and the green space system, this paper makes theoretical assumptions about the impact of environmental industrial structure adjustment on urban ecological green space construction. Then, through the panel data of 260 cities from 2008 to 2018, the impact of China's industrial structure adjustment on the scale of urban ecological green space was empirically analyzed. On this basis, this paper puts forward some policy recommendations for the development of urban ecological green space in our country.

The policy effect of green finance reform and innovations: Empirical evidence at the firm level

The Chinese central government established eight pilot zones in five provinces for green finance reform and innovations (GFRI) in 2017. The pilot zones promote green finance development and explore the propagable and reproducible experiences regarding mechanisms and institutions. Adopting a sample of China's listed companies from 2012 to 2021, this paper constructed a quasi-natural experiment and investigated the GFRI policy's effect on firms' total factor productivity (TFP) using the difference-in-differences (DID) method to verify the implementation effect of the GFRI policy. Furthermore, heterogeneity analysis and mechanism analysis were conducted to identify the guidance effect and deep mechanisms of the GFRI policy. The empirical results demonstrated that firms' TFP in pilot zones increased substantially after implementing the GFRI pilot policy, confirming that the policy had a strong incentive effect. The corresponding promoting effect was particularly significant for non-state-owned companies, the eastern and central regions, and firms in the growth stage. Further mechanism analysis revealed that the GFRI pilot policy can stimulated firms' TFP by promoting technological innovation and improving resource allocation efficiency. This paper's empirical findings are essential in improving relevant policies and expanding the pilot zones.

Can inter-governmental coordination inhibit cross-border illegal water pollution? A test based on cross-border ecological compensation policy

Cross-border illegal water pollution discharge (CIPD) occurs much frequently due to weak environmental supervision and unclear environmental rights. This paper attempts to explore the impact of cross-border ecological compensation policy (CBEC) on CIPD. By using day-night difference of pollution data at administrative boundary monitoring station, illegal water pollution discharge is calculated. Difference-in-differences-in-differences (DDD) model is used to estimate the impact of CBEC on CIPD. First, DDD results show that CBEC can effectively curb CIPD. Second, environmental regulatory effect, environmental governance effect and environmental awareness effect produced by CBEC are tested. CBEC inhibits CIPD by strengthening media supervision and public pollution reporting in environmental regulatory effect, and reduces CIPD by increasing environmental protection investment and environmental law enforcement efficiency in environmental governance effect, and curbs CIPD by promoting environmental information disclosure and reducing environmental corruption in environmental awareness effect. Third, by further analyzing different stages of CBEC, CIPD generated by environmental action coordination and environmental governance mechanism coordination is highly inhibited. Fourth, CBEC has a stronger inhibition effect on CIPD as upstream region is economically underdeveloped and downstream is economically developed. The conclusion provides policy implications from inter-government coordination for restraining CIPD.

Quantitative Evaluation of China's Ecological Protection Compensation Policy Based on PMC Index Model

As a comprehensive benefit coordination mechanism, ecological protection compensation has received increasing attention internationally. China has also introduced a series of policies to promote ecological protection compensation mechanism improvement. The evaluation of ecological protection compensation policies is the main basis for the formulation, adjustment and improvement of the policy. Based on the front-end perspective of policy formulation, this paper selects 10 ecological protection compensation policies issued by the State Council and various ministries in China from 2006 to 2021. A text mining-based PMC index evaluation system using the ROSTCM tool is constructed to quantitatively evaluate these 10 typical policies, and four representative policies are selected for comparative analysis. The overall design of China's ecological protection compensation policies is reasonable, and 5 out of 10 policies have good PMC index scores, which are: P1, P2, P5, P7 and P9; and 5 are at acceptable levels, which are: P3, P4, P6, P8 and P10. However, the PMC surface and the concavity index indicate that there are still some limitations that need to be improved, including the obvious internal differentiation of the policies, the single effectiveness of the policies, and the insufficient incentive and guarantee measures. Finally, this paper provides suggestions for the optimization of ecological protection compensation policies accordingly.

Price and scale effects of China's carbon emission trading system pilots on emission reduction

Constructing and adopting a county-level panel dataset containing carbon emission (CO2) and economic information between 2009 and 2017, this paper employs the continuous difference-in-differences (DID) model and is among the first to conduct an evaluation of the CO2 reduction effect of China's emission trading scheme (ETS) pilot markets from the dual perspectives of price and scale. The empirical results emerge that the increase of transaction price and the expansion of transaction volume in ETS pilots have a persistent and significant influence on CO2 reduction. Parallel to this, it is found the rising of transaction price in ETS can be effective on CO2 reduction by improving the energy structure transition, however, optimization of industrial structure and the development of ICT might be the essential channels driven by the expansion of transaction volume. Last, this paper identifies the synergistic effect on different sorts of contaminants and find it is more substantial to those with the gas state. This paper implies that the policymakers should fully excavate the market-oriented environmental regulation tools from transaction price and volume perspective of views for the well achieving the climate ambitions of carbon peak and neutrality.

How does the ecological compensation mechanism adjust the industrial structure? Evidence from China

The ecological compensation (EC) mechanism is an innovative institutional arrangement which can effectively realize the coordinated development of social-economic growth and ecological protection. The current research on the evaluation of the implementation effect of EC mechanism mainly focuses on its environmental performance, how the EC mechanism guides the economically underdeveloped areas in the upper reaches of the basin to embark on the road of high-quality economic development, especially the mechanism of how EC triggers the optimization and upgrading of industrial structure, it is a topic worthy of in-depth discussion. This study takes China's first cross-provincial horizontal EC mechanism pilot (Xin'an River Basin EC) as the research object and regards it as a quasi-natural experiment. This paper selects the annual panel data of the 11 cities involved from 2009 to 2019 and builds a DID model to study the mechanism of EC affecting industrial structure adjustment systematically. The results show that the EC mechanism mainly promotes the adjustment of the industrial structure in the pilot area through two paths, this is achieved by triggering the transfer of backward or highly polluting industries and promoting the upgrading of the industrial structure. At the same time, technological innovation plays a part intermediary role in the impact of EC to promote the upgrading of industrial structure. Further analysis found that the larger the funds of compensation input, the higher the assessment intensity, the better the effects are. Finally, this study puts forward relevant policy recommendations to further release the potential of the horizontal EC for the reference of decision-makers.