The effect of environmental regulation on the high-quality development of the iron and steel industry-the case of China

While high-quality development (HQD) is a feasible means to achieve coordinated development of the economy, the environment, and society, the most efficient pathway to implement this strategy still remains unknown. How to improve the HQD level of one specific industry through heterogeneous environmental regulation under the comprehensive action of multiple factors such as energy, investment, openness, and structure also remains unclear. To address this research gap, this paper adopts the G1-entropy technique for order of preference by similarity to ideal solution method to quantitatively measure the HQD level of the iron and steel industry (ISI) in China from 2006 to 2019. Then, environmental regulations are divided into three categories: command-based environmental regulation (ERC), market-based environmental regulation (ERM), and voluntary environmental regulation (ERV). Their heterogeneous effects on the HQD level are examined using the Tobit model. The results show that the overall level of HQD in ISI over the past 14 years was only 0.3885, and its evolution trend presented a V-shaped change. Of the four dimensions, the score of integration is the highest and its growth rate is the fastest, while the score of innovation is the lowest and quality benefit has the slowest growth rate. ERC negatively affects the HQD level, and both ERM and ERV have a U-shaped relationship with the HQD level. In the influencing mechanism, ERM is currently the most effective policy tool for promoting HQD, but ERV will soon also contribute significantly. Moreover, the energy production rate provides an important bridge to strengthen the effect of ERM and ERV on the HQD level, and research and development needs to continuously increase to achieve the "innovation compensation effect". This paper enriches the industrial transformation literature and presents important implications for policymakers in China.