The high-quality development (HQD) of river basins is a concern of various governments, and it plays a vital role in developing the surrounding economy and ecological protection. The 2021 UN Environment report Making Peace with Nature states that “by embodying the value of nature in policies, plans, and economic systems, we can direct investment into activities that restore nature” [1
]. However, industrialization and urbanization have caused environmental pollution, resource depletion, and ecological degradation in the Yangtze River, the Yellow River, and other river basins. The contradiction between the “development and protection” of the basin urgently needs to be resolved. The Chinese government attaches great importance to the HQD of river basins. Meanwhile, the government has formulated national strategies, such as ecological protection and the HQD of the Yellow River basin (YRB). The YRB is a critical economic zone in the country. It is a vital area for winning the battle against poverty, and it has an important strategic position in national economic and social development and ecological security construction [2
]. As a natural defense system to prevent environmental and ecological security from being damaged, the YRB is of great significance to ecological protection and construction [3
]. The report of the 19th National Congress of the Communist Party of China in 2017 stated that “the national economy has shifted from a stage of high-speed growth to a stage of high-quality development”. According to “The Outline of the Yellow River Basin Ecological Protection and High-quality Development Plan 2021” released by the Central Committee of the Communist Party of China and the State Council, the principles of ecological protection and HQD must be grasped in the YRB, ecological priority must be adhered to, green development must be boosted, and the road of sustainable HQD must be taken. The YRB suffers from water shortages, severe environmental pollution [4
], insufficient livelihood development, and significant regional differences in resource endowments [6
]. The economic connections of the provinces and regions along the Yellow River are low, and the HQD is insufficient [7
]. In the process of promoting HQD, environmental regulation, as an essential means of controlling pollution and reducing emissions, can motivate the technological renewal of the enterprise [8
]. It plays a vital role in the win–win process of economic growth and ecological protection in the YRB. Therefore, it is of great theoretical and practical significance to build a comprehensive evaluation system for HQD in the YRB and to make reasonable measurements in order to clarify the impact of environmental regulation on HQD.
Currently, the literature on HQD focuses on the definition of connotation and the construction of the evaluation index system. HQD encompasses high-efficiency, fair, green, and sustainable development, and its goal is to meet people’s growing needs for a better life [9
]. There are two methods for measuring the HQD index: the first method is the measurement of a single indicator. HQD is mainly measured by indicators, such as total factor productivity [11
], value-added rate [13
], the intermediate input–output ratio of enterprises, investment efficiency, and labor productivity growth [15
]. In addition, with the increasing attention to resource and environmental issues, many scholars have constructed indicators of green/ecological total factor productivity [17
]. The second method is measurement based on the comprehensive index system. However, a unified evaluation system has not yet been formed. Most existing studies have constructed an evaluation index system based on the new development concept of “innovation, coordination, green, openness, and sharing” [8
Regarding the research on environmental regulation and economic development, there are three main viewpoints. The first viewpoint is based on the “Porter Hypothesis”, which holds that environmental regulation promotes the improvement of the economic level [21
]. The implementation of environmental regulation policies will stimulate scientific and technological innovation, thereby driving the improvement of total factor productivity and offsetting the environmental governance costs of enterprises. Therefore, enterprises will improve production technology, promote production technology into clean technology, and realize the transformation and upgrading of industrial structure. Ultimately, this will drive the HQD of the regional economy [23
]. In addition, some scholars have explored the heterogeneity of environmental regulation on economic growth and found that environmental regulation has a significant role in promoting HQD in the central and eastern regions of China, though it has no significant impact on the western region [24
]. In addition, some scholars found an obvious mutual promotion relationship between environmental regulation and economic growth [25
]. The second viewpoint is based on the following cost effect, which holds that environmental regulation hinders the improvement of the economic level [27
]. In the short term, enterprises will need to invest much human and material capital in technological innovation. This will lead to enterprises’ costs far exceeding the economic benefits. Therefore, enterprises will lose their enthusiasm for green investment [29
]. The third viewpoint is the nonlinear relationship, showing an “inverted U-shaped” relationship [30
]. There is heterogeneity between regions. There is a cost effect in eastern China, an innovation compensation effect in central China, and the strengthening of environmental regulations in western China will inhibit economic growth [32
The research on local government competition focuses on discussing whether the central government should decide on environmental issues in a centralized or local government in a decentralized governance model. Due to the public nature and externality of the environment, the benefits obtained by local environmental governance will spill over to neighboring governments, and the responsibility for environmental pollution will be shared by neighboring governments, resulting in the “free-rider” phenomenon [33
]. In addition, local governments tend to relax environmental regulations to compete for liquid capital, resulting in an environmental “race to the bottom” between regions [34
]. Woods [35
] found that the state governments in the United States relaxed environmental regulations to attract external companies, resulting in environmental degradation. Some studies have proven the existence of a “race to the bottom” in China’s local government environment [36
]. In the eastern region of China, local government competition can improve the neighboring ecological environment, but in the central and western regions, it will aggravate the neighboring environmental pollution [39
]. The rapid development of China’s economy benefits from a vertical political management system and economic decentralization [40
]. Under this system, GDP is an essential basis for promoting officials, so it plays a considerable incentive in improving local economic development [41
]. However, it will lead local governments to pay more attention to short-term political performance and to ignore long-term economic growth [42
]. In addition, to receiving a promotion, officials will implement looser environmental governance methods to attract foreign or local enterprise investment [43
], which results in regulatory failure and environmental degradation [44
]. This is not conducive to the coordinated development of the economy–ecology–environment, which is not conducive to improving HQD.
In summary, the existing studies have both theoretical and empirical levels. However, there are still certain deficiencies: (1) Although there have been many explorations of the measurement of HQD level, due to the short time since it was proposed, the theoretical basis for the construction of HQD indicators is insufficient. In the selection of indicators, many indicators reflect economic development, industrial structure, and growth rate, while few reflect the improvement of people’s livelihoods. (2) Most of the existing literature focuses on the one-way relationship between environmental regulation and economic growth or between local government competition and economic growth. However, there are few studies on environmental regulation and HQD from the perspective of local government competition. Therefore, this paper uses the data of prefecture-level cities in the YRB from 2004–2019 to empirically analyze the effect of environmental regulation and local government competition on HQD.
Based on the above analysis, this paper proposes the following research hypotheses:
Hypothesis 1 (H1).
Environmental regulation can improve the HQD level of the YRB.
Hypothesis 2 (H2).
Under the effect of local government competition, the role of environmental regulation in promoting HQD in the YRB is weakened.
Hypothesis 3 (H3).
The impact of environmental regulation on the HQD of the YRB presents a nonlinear characteristic with the enhancement of local government competition intensity.
Existing research suggests that increasing the intensity of environmental regulation can promote economic growth and improve environmental conditions [21
]. This paper constructs a comprehensive index of HQD, which is different from the previous single index, and it analyzes the impact of environmental regulation on HQD. In addition, it also analyzes the changes in the impact of environmental regulation on HQD under the condition of the increased competition intensity of local governments.
This paper confirms that the impact of environmental regulation on HQD is positive and significant at the 1% statistical level. The stronger the regional environmental regulation is, the higher the threshold for enterprises to enter. This will force high-pollution enterprises to improve green production processes by adjusting their product structure, environmental protection technology, and other production behaviors. This method will promote the greening and high added value of the production process and, ultimately, achieve the goals of reducing pollution, improving environmental quality, and achieving a win–win situation for the economy and the environment [73
]. However, companies with “high pollution, high emissions, and high energy consumption” will move out of areas with high levels of environmental regulation, thereby providing development space for other companies that meet environmental regulation standards. The environmental regulation will promote the optimization of the region’s industrial structure to a green and sustainable structure, in order to protect the ecological environment and promote the sustainable development of the local economy, thereby further improving the HQD level of the region [74
This paper also reveals that the coefficient of the interaction term of environmental regulation and local government competition is negative and significant at the 1% statistical level. In addition, when the local government competition represented by the level of economic catch-up exceeds the threshold value of 3.037, this positive effect of environmental regulation on HQD decreases significantly. On the one hand, local governments pursue short-term interests, tend to attract liquidity such as external investment, and reduce investment in public services such as environmental protection [43
]. When local governments unilaterally pursue economic development, they often lower environmental standards, and it is difficult to implement environmental regulatory measures effectively [42
]. Local governments implement more relaxed environmental governance methods to attract more foreign investment or investment from enterprises in other regions, which, in turn, leads to investment and tax competition between regions, further leading to environmental pollution deterioration. Therefore, local government competition weakens the role of environmental regulation in promoting HQD.
The main contributions of this paper are as follows: (1) Most of the previous studies focused on the whole country or province and measured the HQD level in a cross-section or a short time. Due to the multi-dimensional attributes of HQD with rich connotations, this paper builds a more comprehensive and longer-term HQD index system for prefecture-level cities. (2) This paper incorporates environmental regulation, local government competition, and HQD into the same analytical framework. It adds their interaction terms to explore the combined effect of environmental regulation and local government competition, a supplement to the existing research. (3) This paper constructs a panel threshold model with local government competition as the threshold variable to explore the possible nonlinear relationship between environmental regulation and HQD. (4) This paper uses the generalized method of moments (GMM) to solve the endogeneity problem. Therefore, the reliability of the empirical results is verified. (5) From the perspective of regional heterogeneity, the HQD effects of environmental regulation in the Yellow River basin’s upper, middle, and lower reaches are tested to explore the path for improving the HQD of the YRB.
This paper has the following limitations, which can be further improved in the future: The research area of this paper is the YRB; future research should be extended to other river basins, and a comparative analysis should be carried out. In addition, the HQD index system does not consider the issue of carbon emissions and the efficiency of hydropower utilization. In the future, it is necessary to further improve the connotation and evaluation index system of HQD. Lastly, the impact of environmental regulation on HQD does not consider the spatial effect of environmental regulation. Therefore, in future research, it is necessary to further analyze the impact of environmental regulation on HQD from a spatial perspective.
This paper analyzes the impact of environmental regulation and local government competition on the HQD of the YRB. The results show that environmental regulation has a significant positive impact on HQD. The competition between local governments has an inhibitory effect on the improvement of HQD. Otherwise, with the intensification of competition among local governments, the role of environmental regulation in promoting HQD weakens. Between the development of the economy and the protection of the environment, the local government chooses the speed of economic development, but it ignores the quality of economic development and destroys the ecological environment. Under the single-threshold model, the impact of environmental regulation on HQD has a significant nonlinear positive effect on the improvement of local government competition. Still, when the local government competition exceeds the threshold of 3.037, this positive effect decreases significantly. Regarding the heterogeneity analysis, environmental regulation has a greater effect on the lower reaches of the YRB.
Therefore, further strengthening the environmental regulation of the whole basin is necessary. By promulgating the regulations and policies related to pollution prevention and control, environmental supervision and other means of restraining the pollutant discharge behavior of economic entities are strengthened. The government should use the market mechanism in order to actively motivate enterprises to update methods to reduce pollution emissions. The efficiency of regulation should be improved through voluntary regulatory means, such as environmental information disclosure and participation systems; pollution should be reduced; and the goal of harmonious development between economy and nature should be sought. Moreover, it is necessary to regulate the competition of local governments. The government should optimize the promotion assessment system with economic growth as the single goal or increase the weight of environmental indicators in the assessment system to promote the YRB in order to achieve a high-quality economic–ecological–environmental development model. Lastly, it is necessary to implement different environmental regulation methods with different intensities according to the regional heterogeneity of the upper, middle, and lower reaches. The upstream should appropriately control the intensity of environmental regulation, and incentive-type and guiding-type regulatory policies should be chosen, such as ecological compensation, to provide sufficient cost compensation and income guarantee for ecological protection. The downstream should increase the intensity of environmental regulation, promote the innovation compensation effect, and transform industrial upgrading and the green development model.