Can Environmental Regulation Improve High-Quality Economic Development in China? The Mediating Effects of Digital Economy

Abstract

Environmental regulation is an effective environmental policy tool, which can balance the interests of the government, enterprises, and the public and can effectively address the internalization of environmental externalities. The digital economy has emerged as a brand-new force for the advancement of high-quality economic development. In order to successfully come true to high-quality economic development based on coordinated development of environmental protection and economic growth, the primary objective of this paper is to investigate whether environmental regulation promotes high-quality economic development from a digital economy perspective. This paper empirically analyzed the impact of environmental regulation on high-quality economic development in 236 Chinese cities from 2011 to 2019, using the mediation effect model, threshold regression model, and spatial Durbin model. The results demonstrated that environmental regulation has a significant positive effect on the general high-quality economic development. Specifically, formal environmental regulation has a positive nonlinear effect with decreasing marginal effect on high-quality economic development, whereas informal environmental regulation has a positive nonlinear effect with increasing marginal effects. The digital economy is an important path for environmental regulation to strengthen high-quality economic development. Environmental regulation and the digital economy jointly promote high-quality economic development. In spatial effects, formal environmental regulation has a negative spatial spillover effect on high-quality economic development, whereas informal environmental regulation has a positive spatial spillover effect. Based on these conclusions, it is proposed that the government should actively develop and strengthen the interaction mechanism between formal and informal environmental regulation, enhance the integration of digital platforms and environmental regulation, and develop a coordinated development mechanism for the environment and economy across regions.

Digital economy and green total factor productivity in China

“…The first critical aspect centers on a shift away from direct analysis of the digital economy's economic consequences to a more focused study of intermediate mechanisms. Examples of such mechanisms include the relationship between the digital economy and technological innovation, financial infrastructure, environmental regulations, foreign direct investment, and more [9][10][11][12]. The second crucial aspect involves a greater focus on exploring the interaction between the digital economy and other academic disciplines.…”

Digital economy enables common prosperity: Analysis of mediating and moderating effects based on green finance and environmental pollution

“…The continuous integration of digital technology and the real economy has spawned many new models, but also led to the upgrading of the industrial structure (Su, et al, 2021) and the transformation of the economic development mode (Ahn, 2020). Numerous studies have conducted relevant research mainly in the following directions: first, in economic finance, Wang and Zhang (2022) used a mediating effects model, a threshold regression model and a spatial Durbin model to demonstrate that the digital economy is an important path for environmental regulation to strengthen the high-quality development of the economy, and the two together promote high-quality economic development. Xu et al (2022) argued that the synergistic development of manufacturing and information and communication services has a significant positive impact on economic resilience.…”

Digital financial inclusion and quality of economic growth

“…Kong et al (2021) measured the quality of economic growth based on the efficiency, stability, and sustainability of economic growth using the principal component analysis [ 39 ]. From the perspective of influencing factors, the existing research discusses the impact of industrial agglomeration [ 40 ], transportation infrastructure [ 41 ], environmental regulation [ [42] , [43] , [44] ], import technology [ 45 ], and other factors on the quality of economic growth.…”