Development strategy, technological progress, and regional environmental performance: empirical evidence from China

Based on regional economic development theories, industrial development strategies implemented by governments can distort factor market allocations, change the viability of firms, and thus bring about structural changes in industries. How such policy changes will affect regional environmental performance has been relatively little discussed in the existing literature. This paper attempts to explain whether the implementation of an industrial catch-up development strategy can be a major influence on the level of regional environmental performance from the perspective of comparative advantage, and how this influence can be achieved by changing technological progress. As for the measurement of environmental performance, this paper innovatively adopts two improved measurements based on by-production technology theory to measure the regional environmental performance of Chinese provincial regions from 1997 to 2016. Moreover, the other main novelty is that it adopts Tobit regression models to explicitly explore the effective effects and impact mechanisms of government development strategies on regional environmental efficiency in China. The key findings are as follows (i) the implementation of an industrial catch-up development strategy that defies the comparative advantage of a region can lead to poor environmental performance. (ii). the comparative advantage defying strategy adopted by the eastern regions with higher level of economic development and the regions with priority protection of resources and environment has less inhibiting effect on environmental performance than the central and western regions. (iii). development strategy does impact environmental efficiency through technological progress; more precisely, through technology import and technological transformation rather than independent R & D.