ENVIRONMENTAL REGULATION INNOVATION AND ECONOMIC GROWTH QUALITY AN EMPIRICAL STUDY BASED ON THE PANEL DATA OF 30 PROVINCES IN CHINA

Based on the analysis of the mechanism of environmental regulation and innovation and their impact on the quality of economic growth, this paper proposes the threshold effect hypothesis. Based on the panel data of 30 provinces in China from 2000 to 2019, a threshold regression model is established, and an empirical test is conducted on the hypothesis, discussing in-depth the compound effects of environmental regulation and the cross-terms of environmental regulation and innovation on the quality of economic growth and their regional heterogeneities. The result shows that (1)when the innovation index is lower than the low-order threshold, environmental regulation and its cross-terms show significant combined inhibitory effects on the improvement of the quality of economic growth in the central and eastern regions, while the inhibitory effect in the western region is not significant. When the innovation index exceeds the low-order threshold, the threshold effect presents uncertainty and moves toward a positive cumulative feature. When the innovation index exceeds the high-order threshold, the threshold effect in each region appears to be a significant incentive superposition effect. (2)There are regional heterogeneities in the composite effect of environmental regulation and its cross-terms. The eastern region has a significant incentive superposition effect. The current level of innovation can achieve the double dividends of the improvement of the environment and economic growth quality. The central and western regions have positive cumulative effects. The current innovation level is still far from the threshold at which environmental regulation can produce significant incentive superposition effects.