Chinese Journal of Population, Resources and Environment 19 (2021) 18‒24
Contents lists available at ScienceDirect
Chinese Journal of Population, Resources and Environment
Impact of environmental regulations on the efficient control of
industrial pollution in China
Mian Yanga,b, Xinghong Yana, Qiangyi Lia*
a
Economics and Management School, Wuhan University, Wuhan, 430072, China
b
Center for Population, Resources and Environmental Economics, Wuhan University, Wuhan, 430072, China
A R T I C L E I N F O
Keywords:
Industrial pollution control efficiency
Environmental regulation
Stochastic frontier analysis
Spatial spillover effect
1. Introduction
In recent years, the deteriorating environmental pollution has be‐
come an important factor restricting China ’ s economy and society
(Fan and Zhao, 2019). The annual economic loss due to environmen‐
tal pollution accounts for about 8%– 15% of China ’ s total GDP (Han
and Hu, 2015; Tong et al., 2016). In addition, the health risk due to
environmental pollution has also come to the center of attention from
all aspects of life (Gehrsitz, 2017; Chen et al., 2013; Wang and
Huang, 2015; Shi et al., 2017). Considering that industrial pollution
is the primary source of China ’ s environmental pollution (Jin and
Wu, 2017), strengthening industrial pollution control and improving
* Corresponding author.
E-mail address: workpaper2006@126.com (Q. Li).
https://doi.org/10.1016/j.cjpre.2021.12.025
Received 17 November 2019; Accepted 6 January 2020
2325-4262/© 2021 Shandong Normal University. Publishing services by Elsevier B.V. on behalf of KeAi Communications Co. Ltd. This is an open access article under
the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
journal homepage: www.keaipublishing.com/cjpre
A B S T R A C T
The continuous progress of industrialization is a fundamental cause of China ’ s increasingly severe environ‐
mental pollution problem. Improving the efficiency of industrial pollution control is an inevitable choice to ef‐
fectively decrease pollution emissions, thus winning the battle of pollution prevention and control. In this pa‐
per, we used the stochastic frontier analysis (SFA) model to measure the provincial efficiency of industrial pol‐
lution control based on the input and output data of industrial pollution control of 29 administrative prov‐
inces in China from 2000 to 2017. On this basis, a spatial econometric model was used to explore the influ‐
ence of environmental regulation intensity on the efficiency of industrial pollution control. In addition, the
spatial spillover effect of pollution reduction was thoroughly examined. The results show that: (1) The effi‐
ciency of industrial pollution control in China has improved year by year, but the overall efficiency is still low,
with the average value increasing from 0.165 in 2000 to 0.309 in 2017. Furthermore, there is significant re‐
gional heterogeneity with the highest efficiency level in the east and lowest efficiency level in the west. (2) By
increasing the financial and material input, the efficiency of industrial pollution control has increased. How‐
ever, the increase of human input has not been so helpful. (3) The global Moran ’ s I index is significantly
greater than zero, indicating a strong spatial correlation and agglomeration in the efficiency of industrial pol‐
lution control, which is reflected in high–high agglomeration in the eastern region and low–low agglomera‐
tion in the western region. (4) Stringent environmental regulation has a positive effect on improving the effi‐
ciency of industrial pollution control. It also imposes a positive spatial spillover effect, indicating a strategic in‐
teraction and coordination of regional pollution control. In line with this, related proposals have been made to
optimize the investment structure for environmental pollution control, establish a flow mechanism for the fac‐
tor market, and strengthen the environmental responsibility awareness of state-owned enterprises. On this ba‐
sis, we expect to provide a policy for improving the efficiency of industrial pollution control and promoting re‐
gional joint pollution control in China.
its efficiency are substantial ways to win the tough battle against pol‐
lution. Since the beginning of the new century, the Chinese govern‐
ment has issued a series of strict policies and regulations to curb in‐
dustrial pollution. Under these circumstances, the total number of in‐
dustrial pollution control facilities in wastewater and waste gas has in‐
creased 4.7 times from 79,000 in 2000 to 374,000 in 2015.
However, due to the long-term dependence on the broad eco‐
nomic development model of high energy consumption and high pol‐
lution emission, there is still a large gap between the actual effective‐
ness of industrial pollution control in China and theoretical expecta‐
tions (Xie et al., 2015). Naturally, the following questions arise. What
is the efficiency of industrial pollution control in China? Are there sig‐
M. Yang et al.
nificant regional differences in the efficiency of industrial pollution
control? To what extent do environmental regulations contribute to
improving efficiency? Discussions on these issues have substantial
theoretical and practical implications in scientifically assessing and
improving the effectiveness of industrial pollution control in China
and identifying external constraints.
2. Literature review
Studies on pollution control efficiency are mainly based on the
measurement of pollution control efficiency and its affecting factors.
First, regarding the measurement of pollution control efficiency,
Xiang and Wu (2012) used the Data Envelopment Analysis (DEA)
method to estimate the technical efficiency of industrial waste gas
treatment in 29 administrative provinces in China from 1998 to 2009.
The results showed that the pollution governance efficiency was high‐
est in western China, followed by central and eastern China. Xie et al.
(2015) analyzed the environmental control efficiency of manufactur‐
ing industries using the average values of wastewater compliance
rate, waste gas treatment rate, and solid waste utilization rate. Com‐
pared to evaluate pollution control efficiency, many studies use DEA
models to calculate environmental efficiency. These models generally
use labor, capital, and energy as inputs, GDP as a desirable output,
and environmental pollutants as an undesirable output. For example,
Song et al. (2018) built a Ray slack-based model (RSBM) to evaluate
regional environmental efficiency in China from 2004 to 2012. Wu et
al. (2019) and Sueyoshi and Goto (2014) used the DEA model to
evaluate the environmental efficiency of industry and manufacturing
in China and Japan, respectively. Besides, some scholars have ana‐
lyzed the efficiency of pollution control from the perspective of envi‐
ronmental regulation. For example, Cheng et al. (2015) measured the
efficiency of environmental regulation control in 30 provinces in
China based on the super-efficiency DEA model. Their results suggest
that the distribution pattern of efficiency is high in eastern China and
low in western China. Tang et al. (2017) used the SBM model to ex‐
plore the environmental regulation efficiency of Chinese provinces
and cities from 2003 to 2013. They used the Malmquist productivity
index and decomposed it into a technical progress index, a pure tech‐
nical efficiency index, and scale efficiency.
Second, studies on factors affecting pollution control efficiency
show that, in general, factors such as the degree of economic develop‐
ment, R&D investment, and technological innovation promote the effi‐
ciency of pollution control. In contrast, factors such as the proportion
of secondary industries and coal energy consumption hinder the effi‐
ciency. Wang and Xie (2014) further argue that technological innova‐
tion plays a stronger role in promoting pollution control efficiency
than pollution control investment. Moreover, environmental subsi‐
dies, public participation, fiscal decentralization, and the proportion
of state-owned enterprises are believed to affect pollution control effi‐
ciency significantly. For example, Shi et al. (2016) believe that sub‐
sidy policies can effectively encourage enterprises in the power indus‐
try to operate desulfurization facilities and increase the rate of sulfur
dioxide removal in urban areas. Lan and Chen (2015) showed that fis‐
cal decentralization and institutional softening through official promo‐
tion have a negative impact on the efficiency of air pollution control,
while public assessment has a positive effect. Wang and Yuan (2018)
found that a high proportion of state-owned enterprises has a signifi‐
cant inhibitory effect on energy conservation and emission reduction.
We searched the existing literature and found that several short‐
comings have been conducted that are worthy of further discussion.
First, most researchers calculate environmental efficiency using labor,
capital, and energy as inputs and GDP and pollutant emissions as out‐
puts. In contrast, a few studies estimate the environmental control ef‐
ficiency where pollutant removal is selected as the desired output and
human, material, and financial resources are selected as inputs. Sec‐
ond, few studies have examined the factors affecting pollution control
19
Chinese Journal of Population, Resources and Environment 19 (2021) 18–24
efficiency from the perspective of environmental regulation, and
much less have considered the effects of spatial spillover. Since envi‐
ronmental pollution has strong spatial spillover effects, and the pollut‐
ing enterprises have strong regional mobility, ignoring spatial factors
will lead to deviations in the empirical results.
In this context, we developed the existing research in two aspects
as follows. (1) Against the background of fully considering the re‐
source endowment, economic structure, and random factors in each
region, this paper measures the provincial efficiency of industrial pol‐
lution control in China from 2000 to 2017 by building the SFA model
beyond the logarithmic production function. In this model, the re‐
moval of pollutants is taken as the desired output, and human, mate‐
rial, and financial resources for pollution reduction are taken as in‐
puts into account. (2) Given the spatial spillover effect, we analyzed
the spatial correlation and agglomeration characteristics of industrial
pollution control efficiency using the spatial correlation method.
Based on this, we used a spatial econometric model to examine the
impact of the strength of environmental regulations on the efficiency
of industrial pollution control.
3. Models and data
3.1. The SFA model
Stochastic frontier analysis (SFA) is a typical parameter tech‐
nique for frontier analysis. One of the advantages of SFA is that by
considering the impact of random factors on the output, the estima‐
tion results can more genuinely reflect the actual situation. The funda‐
mental expression of SFA can be shown as follows:
( )
Y it = f x it β exp(v it )exp(-u it )i = 12N ; t = 12T (1)
TE it = exp(-u it ) (2)
Yit represents the output of the ith decision-making unit (DMU)
in period t, xit represents the input of the ith DMU in period t, β is a
parameter vector, f(xit, β) represents a selected stochastic frontier pro‐
duction function, vit is an identically distributed and independent ran‐
dom error, uit is an asymmetric error term measuring the technical in‐
efficiency of each DMU in the production process and obeys a unilat‐
eral normal distribution. vit and uit are independent of each other. TEit
represents the level of technical efficiency as the ratio of actual out‐
put to the expected output. If TEit = 1, then the DMU is technically ef‐
ficient; if 0 < TEit < 1, the DMU is technically inefficient; N is the
sample size, and T is the time.
To avoid heteroscedasticity, the logarithm of both sides of Equa‐
tion (1) is taken to obtain a random frontier analysis model in loga‐
rithmic form as follows:
( )
ln Y it = ln f x it β + v it - u it  i = 12N ; t = 12T (3)
The trans-logarithmic production function is a type of variable
elasticity production function, which allows for better consideration
of the interaction between input factors, and thus Equation (4) is con‐
structed:
1 1
ln Y it =β 0 +β 1 ln F it +β 2 ln M it +β 3 ln L it +
β (ln F it )2 + β 5 (ln M it )2 +
2 4 2
1 1 1 1 (4)
β (ln L it )2 + β 7 ln F it ´lnM it + β 8 ln F it ´lnL it + β 9 ln L it ´lnM it
2 6 2 2 2
+v it -u it
where i represents the province, and t represents the year. Fit, Mit, and
Lit are the total operating cost of industrial wastewater and waste gas
treatment facilities, the total number of industrial wastewater and
waste gas treatment facilities, and the total population of the environ‐
mental protection system at the end of the year, respectively. Yit is the
comprehensive removal index of industrial waste, including SO2,
M. Yang et al.
smoke, dust, and COD in wastewater. Other variables are the same as
those in the aforementioned model.
3.2. Spatial correlation test
According to the theory of spatial econometrics, before establish‐
ing a spatial econometric model, it is necessary to verify whether
there is a significant spatial correlation among the research objects.
In general, two methods are used: global spatial autocorrelation
and local spatial autocorrelation. Among them, the global spatial au‐
tocorrelation aims at examining the overall spatial distribution of the
research objects, which can be estimated by the global Moran ’ s I in‐
dex.
N ∑∑W ij (y i - y)(y i - y)
N N
- -
(5)
i=1 j=1
I=
∑∑W ij∑(y i - y)
2
NN N
-
i=1 j=1 i=1
where N is the number of research objects; yi and yj are the observa‐
tion values of objects i and j, respectively. They represent the indus‐
trial pollution control efficiency (TE) of each province. Wij represents
the binary space weight matrix, which is defined by the adjacent stan‐
dard. If two areas are adjacent in space, they are recorded as 1. Other‐
wise, they are recorded as 0. Hainan Province is assumed to be adja‐
cent to Guangdong and Guangxi Provinces.
Local spatial autocorrelation is applied to explore the spatial cor‐
relation between a region and its surrounding areas. It can be ana‐
lyzed with a Moran index scatter plot where the horizontal axis is the
research object, and the vertical axis is the spatial lag value of the re‐
search object. There are four quadrants: the first quadrant is the high-
high agglomeration area, the third quadrant is the low-low agglom‐
eration area, and the second and fourth quadrants are the low-high
agglomeration and high-low agglomeration areas, respectively.
3.3. Spatial econometric model
Spatial econometric models can be roughly classified into three
categories: spatial lag model (SLM), spatial error model (SEM), and
spatial Durbin model (SDM). Based on the traditional econometric
models, SLM aims to explore the impact of explained variables in the
neighboring area on the explained variables in a certain area by add‐
ing a spatial lag term to the explained variables. The SEM mainly re‐
flects the impact of random disturbance terms in neighboring areas
on the explained variables in the local region by adding spatial corre‐
lation to the error term. The SDM fully considers the spatial impact of
each variable by introducing the spatial lag operator of the explana‐
tory variable, explained variable, and error term into the model.
Moreover, the SDM spillover effect can be decomposed into two
types: direct and indirect effects. The former represents the influence
of independent variables on local dependent variables, while the lat‐
ter indicates the influence of independent variables on other regional
dependent variables. The expressions of the above three models are
as follows:
y it = ρ∑W ij y it + βx it + μ it + λ it + ε it
n
(6)
j=1
y it = βx it + μ it + λ it + ρ∑W ij ψ it + ε it
n
(7)
j=1
y it = ρ∑W ij y it + βx it + ∑W ij x it γ + μ it + λ it + ε it
n n
(8)
j=1 j=1
where yij is the dependent variable, shown as the industrial pollution
control efficiency (TE) in each province in period t; xit is the indepen‐
dent variable, which represents the value of the explanatory variable
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Chinese Journal of Population, Resources and Environment 19 (2021) 18–24
of the ith unit in period t; Wij is the spatial weight matrix; ρ is the spa‐
tial autoregressive coefficient; β is the coefficient value of xit, reflect‐
ing the influence of independent variables on dependent variables; μit
represents the spatial fixed effect; λ it represents the fixed time effect;
ε it is the random error term; W ij ψ itrepresents the spatial autocorrela‐
tion error term; W it x it is the spatial lag operator of independent vari‐
ables; γ is the coefficient of W it x it.
3.4. Variable selection and data description
(1) Explained variables. To measure the provincial efficiency of
industrial pollution control in China, the power of funds, materials,
and personnel in the pollution control process in each region are se‐
lected as inputs, and the comprehensive removal of industrial pollut‐
ants is selected as an output. Each variable is explained as follows:
1) Financial investment (Fit) is measured in terms of the actual operat‐
ing cost of industrial wastewater and waste gas treatment facilities,
and the unit is 10,000 Yuan. 2) Material input (Mit) is defined as the
total number of industrial wastewater and waste gas treatment facili‐
ties, and the unit is set. 3) Manpower input (Lit) shows the number of
personnel in the environmental protection system at the end of the
year, and the unit is person. 4) Pollutant removal rate (Yit), calculated
by the comprehensive removal amount of industrial SO2, industrial
smoke (powder) dust, and COD in industrial wastewater. Given that
resource endowment and economic structure vary from province to
province and that the SFA method cannot directly deal with multiple
output efficiencies, the entropy method is constructed to handle the
data of pollutant removal. In this paper, we first multiply the recipro‐
cal of the pollutant intensity by pollutant removal and then use the
entropy method to obtain the total amount of pollutant removal. To
eliminate the impact of dimensionality, all the input variables de‐
scribed above are standardized.
(2) Core explanatory variables. To explore the impact of environ‐
mental regulation on the efficiency of industrial pollution control, en‐
vironmental regulation (eps) is chosen as the core explanatory vari‐
able. According to the literature, the pollution control investment, the
proportion of pollution control investment to GDP (He and An, 2019),
the total investment in industrial pollution control (Song and Wang,
2013; Guo and Zhang, 2014; Li and Cao, 2017), and the proportion of
total investment in industrial pollution control to total industrial out‐
put (Gong and Shen, 2011) are commonly used for this indicator. As
this work mainly focuses on the industry, the total investment in in‐
dustrial pollution control is selected as the proxy for the strength of
environmental regulation. This involves the investment in treating in‐
dustrial wastewater, waste gas, solid waste, and other pollutants. The
greater the investment in industrial pollution control, the more ad‐
vanced the pollution control equipment and technology, and the
higher the efficiency of industrial pollution control.
(3) Other control variables. Level of economic development
(rgdp): expressed as the actual GDP per capita, industrial structure
(cy): shown as the proportion of the total output of tertiary industry
to GDP, the degree of openness (fdi): expressed as the proportion of
foreign direct investment to GDP, urbanization rate (cs): expressed as
the proportion of the urban population to the total population of the
region, ownership structure (syz): expressed as the proportion of the
total output of state-owned and state-holding industrial enterprises to
the total output of industrial enterprises above designated size, tech‐
nology input (jstr): expressed as the proportion of R&D investment to
GDP. To avoid the influence of heteroscedasticity, all the above vari‐
ables are processed as logarithmic. Descriptive statistics are shown in
Table 1.
Data sources: Due to the severe lack of data in Hong Kong, Ma‐
cau, Taiwan, Tibet, and Qinghai, 29 administrative provinces were se‐
lected for 2000–2017. Meanwhile, since some data (the number of in‐
dustrial wastewater and industrial waste gas treatment facilities, oper‐
M. Yang et al. Chinese Journal of Population, Resources and Environment 19 (2021) 18–24

Table 1
Variable description and descriptive
Variable Definition Mean Max. Min. Std. Dev
Fit Total actual operating cost of treatment facilities in industrial wastewater and waste gas /RMB 10,000 335022.4 2587669 3466.2 380454.1
Mit Total number of treatment facilities in industrial wastewater and waste gas/set 8863 35406 575 6306
Lit Total population of environmental protection system at the end of the year/person 6106 27017 629 4463
Industrial SO2 removal/104 ton 82.4 585.5 0.1 86.9
Yit Industrial dust removal/104 ton 1508.0 7084.9 35.3 1349.2
COD removal in industrial wastewater/104 ton 50.5 865.4 0.2 69.7
eps The completed investment of industrial pollution control/RMB 108 22.5 135.7 0.7 20.8
rgdp Real GDP per capita/RMB ten thousand 2.291 11.284 0.265 1.730
cy The proportion of the tertiary industry's total output to GDP 0.414 0.806 0.286 0.085
fdi The proportion of foreign direct investment to GDP 0.449 5.858 0.048 0.549
cs The proportion of urban population to total population 0.503 0.896 0.233 0.154
The proportion of the total output of state-owned and state-holding industrial enterprises accounted for
syz 0.427 0.882 0.024 0.200
total industrial output
jstr The proportion of R&D investment to GDP 0.013 0.063 0.002 0.011

ating costs of industrial wastewater and industrial waste gas treat‐
ment facilities, and the personnel of environmental protection sys‐
tem) are only available before 2015, industrial pollution control effi‐
ciency for subsequent years is estimated based on the moving
weighted average method. The original data for the core explanatory
and control variables were derived from the China Statistical Year‐
book, the China Environment Yearbook, and the China Statistical Year‐
book on Environment. All relevant economic data are deflated by the
producer price index and the GDP index, using 2000 as the base year.
Pollutant removal data are expressed as the gap between output and
emissions. Fdi is measured as the proportion of foreign direct invest‐
ment to GDP. Foreign direct investment is determined based on the
exchange rate of the year, while GDP is calculated as the price of the
year.
4. Empirical results and analysis
4.1. Results of industrial pollution control efficiency
The SFA model was used to measure the efficiency of industrial
pollution control in 29 administrative provinces of China. The results
show that financial investment, material inputs, and their interactions
all have significant positive effects on the efficiency of industrial pol‐
lution control. In contrast, human input has no significant negative ef‐
fects. These findings indicate that the efficiency improvement of in‐
dustrial pollution control in China mainly depends on the input of pol‐
lution removal facilities, which require reasonable cost to ensure
their normal operation.
At the national level, the efficiency of industrial pollution control
has increased from 0.165 in 2000 to 0.309 in 2017. In other words,
environmental governance capacity has gradually improved, but the
overall level is still low. On the one hand, as the problem of resource
shortage and environmental pollution becomes gradually serious, the
Chinese government is paying more attention to the coordinated de‐
velopment of the economy and the environment. This measure will
optimize the green production technology for industrial enterprises
and pollution control technologies. As a result, the efficiency of indus‐
trial pollution treatment has been improved.
On the other hand, considering that China ’ s economic growth
has not completely changed from extensive to intensive, there are still
some problems in the pollution control process, such as limitations on
pollution control technology and low public participation in environ‐
mental protection. Therefore, China ’ s industrial pollution control effi‐
ciency is at a relatively low level. Consequently, it is necessary to in‐
crease the utilization rate of environmental protection investment
funds.
At the provincial level, there is clear heterogeneity in the effi‐
ciency of the provinces during the research period. Shanghai, Beijing,
Zhejiang, Jiangsu, and Guangdong have high efficiencies in industrial
pollution control, with values of 0.949, 0.514, 0.510, 0.497, and
0.485, respectively. In contrast, Ningxia, Shanxi, Xinjiang, Gansu, and
Shaanxi have low efficiencies in industrial pollution control, with val‐
ues of 0.042, 0.059, 0.060, 0.073, and 0.083, respectively. Moreover,
five most efficient provinces are all located in the eastern part of the
country, where the economy is growing. In Shanghai, for example,
the tertiary industry accounts for nearly 70% of the regional GDP,
and the financial and service sectors are highly developed, providing
sufficient financial and technical support for industrial pollution con‐
trol. Comparatively speaking, the five provinces with low industrial
pollution control efficiencies are mainly located in the mid-western re‐
gions with slow economic development, such as Ningxia and Shanxi.
These two provinces have a high proportion of heavy industries with
high energy consumption and high pollution. Moreover, they lack suf‐
ficient financial and technical support for environmental protection,
resulting in low efficiency in industrial pollution control.
At the regional level, there is also a significant difference in the
efficiency of industrial pollution control among the eastern, central,
and western regions. The eastern part has the highest efficiency value
(0.414), followed by the central (0.139) and western (0.104) regions,
showing a descending order from east to west. This is consistent with
the results of many studies. Of the ten most efficient provinces, nine
are in the eastern region. On the other hand, provinces in the western
regions are generally less efficient. The possible reasons are the fol‐
lowing. (i) The eastern region has a high economic development and
technology level and can absorb and utilize foreign resources effi‐
ciently. This allows the region to fully optimize the allocation of re‐
sources. In addition, the western region has a relatively inadequate in‐
vestment in pollution prevention and a relatively low technological
level, so it cannot increase the efficiency of pollution control. (ii) The
industrial structure in the eastern region tends to be more rational,
with high-tech and service industries booming. On the other hand,
the western region is still experiencing widespread growth, with sev‐
eral high-pollution and high-energy consumption industries. (iii) With
the improvement of economic development in the eastern region, pub‐
lic awareness of environmental protection and associated needs are
constantly increasing, encouraging industrial enterprises to improve
their pollution control efficiency.

21
M. Yang et al. Chinese Journal of Population, Resources and Environment 19 (2021) 18–24

4.2. Spatial correlation analysis tween industrial pollution prevention efficiency in various regions.
Provinces with developed economies and optimized industrial struc‐
Table 2 shows that the global Moran ’ s I index of industrial pollu‐ tures have high industrial pollution control efficiency. The surround‐
tion control efficiency in China is significantly greater than zero and ing regions also have high industrial pollution control efficiency due
increases year by year. This indicates that the spatial distribution pat‐ to the synergistic effects of policies, technologies, talents, and goals.
tern of efficiency presents a significant positive correlation. In other For the same reason, areas with rapid economic development are less
words, the higher the efficiency of one region, the higher the effi‐ efficient at preventing industrial pollution, and the efficiency of the
ciency of the adjacent regions, and vice versa. In addition, the concen‐ neighboring regions is correspondingly low.
tration of industrial pollution control efficiency is gradually increas‐
ing. The scatter plots of the Moran ’ s index in 2000 (Fig. 1) and 2007
(Fig. 2) reveal that the efficiency of each province presents the charac‐
teristics of high-high agglomeration and low-low agglomeration. Bei‐
jing, Tianjin, Shanghai, Jiangsu, Zhejiang, Fujian, and Shandong are
the high-high agglomeration areas located mainly in the eastern prov‐
inces. At the same time, Shanxi, Hubei, Hunan, Chongqing, Sichuan,
Guizhou, Yunnan, Shaanxi, Gansu, Ningxia, and Xinjiang are the low-
low agglomeration areas located mainly in the central and western
provinces. The eastern region shows a high degree of economic devel‐
opment and a high-high level of agglomeration due to its geographi‐
cal advantage along the sea.

Table 2
Overall Moran ’ s I index for industrial pollution control efficiency in China
from 2000 to 2017
Year Moran's I E(I) sd(I) Z statistics p-value
2000 0.417 −0.036 0.108 4.193 0.000
2001 0.422 −0.036 0.109 4.202 0.000 Fig. 1. Scatter plot of Moran ’ s I index for industrial pollution control effi‐
ciency in China in 2000.
2002 0.427 −0.036 0.110 4.210 0.000
2003 0.432 −0.036 0.111 4.218 0.000
2004 0.436 −0.036 0.112 4.225 0.000
2005 0.440 −0.036 0.112 4.232 0.000
2006 0.444 −0.036 0.113 4.239 0.000
2007 0.448 −0.036 0.114 4.245 0.000
2008 0.451 −0.036 0.115 4.251 0.000
2009 0.455 −0.036 0.115 4.257 0.000
2010 0.458 −0.036 0.116 4.262 0.000
2011 0.461 −0.036 0.116 4.267 0.000
2012 0.463 −0.036 0.117 4.272 0.000
2013 0.466 −0.036 0.117 4.276 0.000
2014 0.468 −0.036 0.118 4.280 0.000
2015 0.471 −0.036 0.118 4.284 0.000
2016 0.473 −0.036 0.119 4.288 0.000
2017 0.476 −0.036 0.119 4.292 0.000
Fig. 2. Scatter plot of Moran ’ s I index for industrial pollution control effi‐
ciency in China in 2017.
In contrast, the central and western regions show a low-low ag‐
glomeration due to their low economic development and resource uti‐ 4.3. Empirical results
lization efficiency. This is consistent with the national results that Mo‐
ran's I index is significantly greater than zero. Comparing the spatial The results of the tests show that the LMlag, R-LMlag, LMerror,
agglomeration in 2000 and 2017, we found that provinces with simi‐ and R-LMerror of the traditional panel data with no fixed effects, spa‐
lar spatial correlations account for 75.9% and 82.8%, respectively. tially fixed effects, temporal fixed effects, and double fixed effects
The high and low agglomeration regions are relatively stable and models are all significantly greater than zero, indicating that the SLM
have strong path dependency. A possible reason for this is that envi‐ and SEM are superior to the traditional panel model with no spatial
ronmental pollutants in one region tend to spread to the surrounding effects. Meanwhile, the Wald and LR results of the SLM and SEM are
regions, leading to a negative spillover effect. In addition, the ambigu‐ also significantly greater than zero, indicating that the SDM cannot
ous definition of responsibility in environmental governance has led be simplified in the form of the SLM and SEM. Therefore, the SDM is
to the phenomenon of “free-riding”, which fails to fully mobilize the selected for regression estimation, and the estimation results are
enthusiasm of all stakeholders in pollution control. This is because shown in Table 3.
the negative externality of environmental pollution and the ineffi‐ Table 3 shows that the following topics can be discussed. (1) The
ciency of territorial pollution governance models have led more and estimated coefficient, direct effect, and indirect effect of environmen‐
more local governments to seek joint governance in policy and tech‐ tal regulations (eps) are 0.055, 0.062, and 0.104, respectively, all of
nology. Therefore, there is a significant positive spatial correlation be‐

22
M. Yang et al. Chinese Journal of Population, Resources and Environment 19 (2021) 18–24

Table 3 were still robust.

Estimation results for the panel spatial Durbin model
Variable Estimated Value Direct Effect Indirect Effect Total Effect 5. Conclusion and suggestions
0.055*** 0.062*** 0.104*** 0.166**
eps Based on the input-output data of industrial pollution control in
(0.006) (0.007) (0.020) (0.024)
0.281 ***
0.296 ***
0.257 ***
0.553 *** 29 administrative provinces of China from 2000 to 2017, we con‐
cy structed an SFA model based on the trans-log production function to
(0.031) (0.029) (0.088) (0.103)
measure the provincial efficiency of industrial pollution control in
0.177*** 0.184*** 0.078 0.262***
rgdp
(0.020) (0.020) (0.062) (0.071) China and use the spatial correlation method to verify the spatial ag‐
glomeration characteristics of efficiency. On this basis, this paper fur‐
−0.015** −0.004 0.143*** 0.138***
fdi ther explores the impact of environmental regulations on industrial
(−0.007) (−0.008) (0.029) (0.033)
pollution control efficiency using a spatial econometric model. As a
0.027** −0.024 −0.653*** −0.677***
cs result, we found the following: (1) Industrial pollution control effi‐
(0.036) (−0.037) (−0.114) (−0.128)
ciency among different provinces is increasing year by year, indicat‐
0.030*** 0.022** −0.135 −0.114*** ing a decreasing distribution pattern from east to west. (2) Industrial
syz
(0.010) (0.011) (−0.029) (−0.035)
pollution control efficiency among different regions has significant
0.035*** 0.033*** −0.038* −0.005 spatial correlation, agglomeration, and relatively stable path depen‐
jstr
(0.008) (0.008) (0.021) (0.023) dence. Specifically, the eastern region shows high-high agglomera‐
0.050*** tion, while the western region shows low-low agglomeration. (3) Envi‐
Wx_eps
(0.014) ronmental regulations actively promote the efficiency of local indus‐
0.384*** trial pollution control and have a positive spatial spillover effect on
rho
(0.056) the surrounding areas, reflecting the strategic interaction of pollution
likelihood 675.823 control and the coordination of various resources among regions.
Obs 522 522 522 522 Thus, the following suggestions are put forward:
(1) Optimizing the investment structure of environmental pollu‐
Notes: (1) Symbols ***, **, and * denote significance levels of 1%, 5%, and
tion control and strengthening environmental regulations. According
10%, respectively. (2) Wx_eps denotes the spatial lag of environmental regula‐
to the empirical results, China has not efficiently invested in environ‐
tions, limited by space, and the spatial lags of other control variables are
omitted.
mental protection personnel. Therefore, it is necessary to optimize the
investment structure of environmental pollution control and raise the
environmental responsibility awareness of environmental protection
which are significant at the 1% statistical level. This indicates that en‐ personnel. In addition, it is imperative to strengthen environmental
vironmental regulations play a positive role in promoting the effi‐ regulations in multiple ways, including making the most of effective
ciency of industrial pollution control in the region and have positive market mechanisms and relying on the constraints of the environmen‐
spatial spillover effects on the surrounding areas. Increased invest‐ tal protection legal system.
ment in pollution control means that industrial enterprises will have (2) Raising the awareness of the environmental responsibility of
sufficient funds to purchase pollution control equipment and improve state-owned enterprises, optimizing their industrial structures, and im‐
pollution control technology. At the same time, the strategic interac‐ proving their pollution control technologies. State-owned enterprises
tion between environmental governance and the coordination of need to take full advantage of their policy to play an exemplary role.
policy, technology, and human resources will lead to positive spatial In parallel, the government should adjust the industrial structure of
spillover effects in surrounding areas. (2) The estimated coefficients the mid-west region and increase investment in R&D for environmen‐
and direct effects of industrial structure (cy), economic development tal protection.
level (rgdp), and technology input (jstr) are all significantly positive, (3) Upgrading the structure of foreign investment utilization and
indicating that the above variables can boost the efficiency of indus‐ improving the urban environment. In the process of introducing for‐
trial pollution control in each region. However, the indirect effect of eign investment, the government should strictly restrict the entry of
economic development level (rgdp) is not significantly positive due to foreign-invested projects with heavy pollution emissions and high en‐
factors such as pollution transfer. (3) The estimated coefficient of for‐ ergy consumption. In contrast, the introduction of foreign-invested
eign direct investment (fdi) is positive, but its direct and indirect ef‐ projects with low energy consumption and high added value must be
fects are negative. This indicates that foreign direct investment has an emphasized. Furthermore, in the process of urbanization, the govern‐
inhibitory effect on efficiency improvement and has a negative spatial ment should emphasize the disposal of household waste and take full
spillover effect on surrounding areas, which may be due to the irratio‐ advantage of the resource-intensive nature of cities.
nal structure of foreign direct investment. (4) Both the estimated coef‐ (4) Establishing a factor market flow mechanism to promote
ficient of the urbanization rate (cs) and its indirect effect are signifi‐ inter-regional exchanges and learning. In China, the efficiency of in‐
cantly negative, but its direct effect is not significantly negative. This dustrial pollution control is relatively low, with noticeable regional
means that the urbanization rate has minor adverse effects on the effi‐ differences and solid spatial dependency. Therefore, it is necessary to
ciency improvement of industrial pollution control in the region and establish a suitable mechanism to actively guide the flow of industrial
adverse spatial spillover effects on the surrounding areas. These can pollution control resources among regions. It is also essential to en‐
be explained by the fact that many rural populations cluster in cities, courage the developed regions in the east to transfer funds, technol‐
bringing a series of social and environmental problems such as urban ogy, and human resources to the mid-west region to achieve coordi‐
traffic congestion, municipal waste, urban wastewater, and waste gas nated development of the eastern, central, and western regions. This
emissions. (5) The estimated coefficients, direct and indirect effects of can be realized by establishing a long-term and effective platform for
ownership structure (syz) are significantly positive. Given that state- sharing green production and pollution control technologies.
owned enterprises play a leading role in the utilization of policy re‐
sources, the ownership structure of enterprises is expected to have a Disclosure statement
positive effect on efficiency. In addition, a robustness test was investi‐
gated by adjusting the choice of environmental regulatory variables The authors report that there are no potential conflicts of interest.
and the construction of the spatial weight matrix, and the results

23
M. Yang et al.
Funding
National Natural Science Foundation of China: The enhancing po‐
tential and realizing paths of China ’ s industrial total factor productiv‐
ity: A perspective of energy price distortion correction [Grants num‐
ber. 71774122]; China Postdoctoral Science Foundation: Research on
the Emission Reduction Effect Evaluation and Mechanism of China ’ s
Low-Carbon City Pilot Policies [Grants number. 2019M662721].
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