Threshold Effect of Environmental Regulation on Eco-Friendly Productivity: Empirical Evidence From China

Abstract

This paper identifies the existence of a significant nonlinear relationship between environmental regulation (ER) and eco-friendly efficiency (EFE) adopting the panel smooth transition regression model. It is interesting to find that ER has temporarily inhibited EFE growth in China. An initial downward trend is reversed and shows upward improvement from a distinct point, creating a V-shaped trend.