Computers & Industrial Engineering 148 (2020) 106748

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Computers & Industrial Engineering

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Environmental regulation policies, local government enforcement and

pollution-intensive industry transfer in China
Guoxing Zhang a, b, Wei Liu a, Hongbo Duan c, *
a
School of Management, Lanzhou University, Lanzhou 730000, China
b
Institute of Green Finance, Lanzhou University, Lanzhou 730000, China
c
School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China

A R T I C L E I N F O A B S T R A C T

JEL Code: Pollution-intensive industries are the focus of regulatory targets in environmental regulation policies, which are
G28 the basis for the enforcement of environmental regulation by governments at all levels. Based on the “pollution
K23 haven” hypothesis, we select Beijing-Tianjin-Hebei and the surrounding regions (Henan, Shandong, Shanxi) as
L51
the objective areas. By constructing spatial panel measurement models, we study the impact of environmental
P48
regulation policies on the transfer of the overall industry and five pollution-intensive industries, and explore the
Keywords:
possible roles of the local government environmental regulation enforcement. The results show that environ­
Environmental regulation policies
Local government enforcement
mental regulation policies have not caused an obvious phenomenon of industrial transfer out of Beijing-Tianjin-
Pollution-intensive industry transfer Hebei and the surrounding regions, and the intervention of local government environmental regulation
Informal environmental regulation enforcement will not change this situation. Environmental regulation policies have different impacts on the
transfer of different pollution-intensive industries. The interaction effect of the enforcement of local government
environmental regulation will lead to industrial transfer in the ferrous metal smelting and rolling processing
industry and the petroleum processing, coking and nuclear fuel processing industry. The transfer of pollution-
intensive industries in Beijing-Tianjin-Hebei and the surrounding regions is more affected by economic devel­
opment, infrastructure construction, R&D investment and other factors.

1. Introduction through regional joint governance. However, its environmental gover­

Environmental pollution is almost a thorny issue that every indus­
trialized country has faced. Faced with serious environmental pollution,
European and American countries have adopted regional joint gover­
nance approach and achieved good results. Regional joint governance of
environmental pollution helps balance the interests of different eco­
nomic development regions and achieve pollution control objectives. It
is one of the important directions of world pollution control research. At
present, developed countries such as Europe and the United States have
accumulated certain experience in regional joint governance. However,
as far as developing countries are concerned, regional joint governance
of environmental pollution is still in the exploratory stage, and the
governance process and governance effects have to be tested. China is a
developing country with uneven regional economic development. The
environmental pollution caused by high-speed industrialization has
attracted the attention of all countries in the world. In recent years,
China has tried to achieve pollution prevention and control targets
nance issues are complex and diverse, and it is not possible to simply
apply the regional joint governance approach that developed countries
adopted. Studying environmental pollution’s regional joint governance
of China will not only help China’s pollution control, but also have
guiding significance for the joint governance of environmental regions
in a wide range of developing countries.
Since the 1990s, developed countries have further transferred labor-
intensive and capital-intensive industries with serious pollution and
some low-value-added technology-intensive industries overseas. China
has become the main recipient of international industrial transfer, as
well as a veritable global manufacturing base (Liu & Diamond, 2005).
With its rapid industrial development, China has paid a high environ­
mental cost and become one of the most polluted countries in the world
(Li & Ramanathan, 2018). The effects of air pollution caused by local
environmental deterioration affect not only China but also the envi­
ronment of neighboring countries and even the whole world (Liu &
Diamond, 2005). The continuous pollution emission of pollution-

* Corresponding author.
E-mail address: hbduan@ucas.ac.cn (H. Duan).

https://doi.org/10.1016/j.cie.2020.106748
Received 12 February 2020; Received in revised form 24 May 2020; Accepted 8 August 2020
Available online 12 August 2020
0360-8352/© 2020 Elsevier Ltd. All rights reserved.
G. Zhang et al.
intensive industries should be largely responsible for environmental
deterioration (Huang & Duan, 2020; Zhang, Hu, Langari, & Cao, 2019;
Zhang, Deng, Mou, Zhang, & Chen, 2019), and the pollution control of
industry has become a topic of common concern in China and interna­
tionally (Cheng, Li, & Liu, 2018).
Strengthening the intensity of environmental governance, taking
environmental quality improvement as the core of public policies,
implementing a strict environmental protection system and forming an
environmental governance system involving the government, enter­
prises and the public are an important part of China’s national economic
and social development. China’s environmental governance system has
changed from single-dimensional government regulation to pluralistic
cogovernance, and public participation in environmental protection has
become an important driving force (Tole & Koop, 2010). Policy is the
basis of environmental regulation, particularly for emissions mitigation
(Ding, Chen, & Wang, 2020; Duan, Zhang, Wang, & Fan, 2019). From
2004 to 2016, the central government of China promulgated as many as
1100 ERP aimed at pollution prevention and control, and 873 of them
were promulgated in Beijing-Tianjin-Hebei and the surrounding regions;
and the strictness of the policies has been continuously strengthened.
As regulators, local governments should play a leading role in
environmental regulation aiming at pollution prevention and control
(Yang & He, 2015). While restraining and guiding social environmental
protection behaviors, they should strictly implement ERP and
strengthen the supervision and punishment of polluting enterprises. In
recent years, the worsening air pollution in Beijing-Tianjin-Hebei and
the surrounding regions has shown that the government’s environ­
mental regulation is weak, but the “APEC blue“ incident in 2014 shows
that the government has a strong ability to regulate the environment.
Environmental regulation is generally considered as one of the rea­
sons for the recent transfer of pollution-intensive industries in China,
and with the process of industrial structure adjustment, the industrial
transfer has become an important means to optimize the industrial
layout (Shen, Wei, & Yang, 2017). The guiding principle of industrial
development and transfer is promoting the rational and orderly transfer
of industry on the basis of overall coordination of the western, northeast,
central and eastern regions, taking into account energy resources,
environmental capacity, market space and other factors (Du, Song,
Duan, Tsvetanov, & Wu, 2020). From the current industrial situation of
Beijing-Tianjin-Hebei and the surrounding regions, the long-term eco­
nomic development makes the industry in Beijing, Tianjin and Hebei
isomorphic. Promoting industrial transfer and docking is an important
way to realize industrial cooperation strategies. Given these circum­
stances, we intend to explore what is the relationship between envi­
ronmental regulation and industrial transfer in Beijing-Tianjin-Hebei
and the surrounding regions?
By controlling the impact of public participation and taking local
government environmental regulation enforcement as an influencing
factor, we develop a spatial panel model framework, and discuss the
relationship between China’s environmental regulation and the transfer
of pollution-intensive industries. We contribute to the extant literature
in three aspects: (1) It emphasizes the effect of public participation in
environmental regulation on pollution-intensive industry transfer,
which makes up for the lack of previous studies on the effectiveness of
informal environmental regulation. (2) The local government’s envi­
ronmental regulation enforcement is included as the intermediary factor
that affects the effectiveness of ERP and pollution-intensive industry
transfer, we break through the limits of qualitative research and explore
the impact of local government in environmental regulation with
quantitative research methods. (3) By taking Beijing-Tianjin-Hebei and
the surrounding regions, a key area for the implementation of pollution
prevention and control policies, as the target regions, this paper analyzes
the impact of ERP in specific regions on the transfer of pollution-
intensive industries, which provides an insightful reference for the
scientifically-based formulation and implementation of policies.
The remainder of this work will be structured as follows. Section 2
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Computers & Industrial Engineering 148 (2020) 106748
surveys the relevant literature on environmental regulations. Section 3
analyzes the current situation of industrial transfer in Beijing-Tianjin-
Hebei and the surrounding regions in China. Section 4 describes the
data sources, discusses the methods of variable measurement and model
construction. Empirical results and analysis are given in Section 5.
Section 6 presents a further robustness test of the results. Section 7
concludes the paper.
2. Literature review
2.1. Definition of environmental regulation
Environmental regulation refers to the means, mechanisms and ac­
tions adopted to control and influence the behavior of target groups in
the field of environmental protection (Linares, Batlle, & Pérez-Arriaga,
2013). In general, environmental regulation is understood as a regula­
tion implemented by state actors through the promulgation of detailed,
normative and legally binding rules. However, this narrow perspective
has increasingly given way to the broader concept of environmental
regulation, which includes a wider range of environmental regulation
actors, methods and forms of control, and it can be categorized into two
types: i.e., formal environmental regulation and informal environmental
regulation.
In China, formal environmental regulation refers to the direct and
indirect intervention of various types of laws and regulations made by
the government on environmental resources, and it measured by the
effectiveness of ERP at both central and local levels. The central policies
are important basis for local governments to carry out environmental
governance, while the local policies are given according to the actual
situation of each province and the central government. Both types of
policies play roles in the process of environmental regulation. Informal
environmental regulation is usually determined by the public’s envi­
ronmental demands. Pargal and Wheeler (1996) believed that the
absence or low intensity of government-led environmental regulation
will lead some social organizations to negotiate with local polluting
enterprises to reach an agreement that is more conducive to environ­
mental protection, and they called this phenomenon “informal envi­
ronmental regulation”. With the improvement of public education and
the enhancement of environmental awareness, public participation in
environmental regulation is becoming increasingly extensive. Public
environmental complaints can not only provide valuable information for
environmental regulatory departments so that the government could
effectively inspect polluting enterprises more but also form a deterrent
to polluting enterprises to curb pollution behaviors (Dong, Ishikawa,
Liu, & Hamori, 2011). Since the 1990s, the scope of informal environ­
mental regulation has gradually expanded. In addition to public com­
plaints, the media, non-government organizations (NGOs), companies
and trade associations have become new subjects involved in informal
environmental regulation. Informal environmental regulation has
received increasing attention in China’s environmental pollution con­
trol. As an important supplementary factor when formal environmental
regulation is absent or poorly implemented, informal environmental
regulation is considered to be the third regulatory wave following
government-led administrative command regulation and the market-led
market-oriented regulatory approach (Sterner, 2002; Tietenberg, 1998).
Normative policies, coupled with stakeholder participation, are
particularly important for developing countries with insufficient ca­
pacity for environmental regulation (Dong et al., 2011). Comprehensive
consideration of formal and informal environmental regulation is
helpful to more accurately judge the impact of environmental regulation
on pollution-intensive industries and analyze the factors affecting the
transfer of pollution-intensive industries. Most of the existing studies
take formal environmental regulation as the research object, without
considering the effect of informal environmental regulation. This paper
will examine the impact of formal environmental regulation and
informal environmental regulation simultaneously by putting them
G. Zhang et al.
under the same analytic framework.
2.2. Government environmental regulation enforcement
The environmental regulation intensity contained in ERP is a
mandatory binding force. To achieve effective environmental protec­
tion, we cannot rely solely on the efforts of the central government. The
actual effectiveness of environmental regulation policy is usually
determined by environmental regulation enforcement of the local gov­
ernment, which mainly refers to the resources, management level and
willingness of the local government to implement environmental pol­
icies (Francesch-Huidobro, Lo, & Tang, 2012; He, Zhang, & Yang, 2013).
Generally, if the local government does not implement environmental
regulations, rational polluting enterprises will not carry out any pollu­
tion control activities. The stronger the enforcement of local govern­
ments, the greater the effectiveness of ERP and the more obvious the
regulatory effects. However, in the process of environmental regulation,
local governments do not necessarily choose behavior according to the
goal of maximizing social welfare (Parry, Pizer, & Fischer, 2003). Due to
the obvious differences in social, economic and other aspects among
provinces, local governments may show different behavior preferences
when implementing ERP, as a result of different environmental regula­
tion motivation (Xu, 2011). Many behaviors, such as regional protection
and regional competition, regarding the rigor of environmental regula­
tion as an opportunity to attract investment and promote economic
development, making enforcement actions that weaken or violate the
requirements of ERP, may all lead to policy failure (Zhu, He, & Liu,
2014). The existing studies basically start from environmental regula­
tion intensity and study its direct impact on industrial transfer. This
paper will consider the role of local governments and uncover the
impact of local governments’ environmental regulation enforcement in
the process of ERP that greatly affects the transfer of pollution-intensive
industries.
2.3. Environmental regulation and industrial transfer
The pollution haven is a hypothesis describing the relationship be­
tween environmental regulation and industrial transfer (Walter &
Ugelow, 1979). It refers to the fact that free trade leads to pollution-
intensive industries that tend to be established in areas with relatively
low environmental standards. The pressure of ERP may lead polluting
enterprises to shift from areas with high environmental regulation in­
tensity to areas with low environmental regulation intensity. Re­
searchers have different opinions on whether the pollution haven exists.
Researchers with negative attitudes believe that the main factors
determining the flow of polluting enterprises are market size, economic
growth rate, industrial agglomeration effect, and infrastructure quality.
The impact of environmental regulation intensity is very small or even
nonexistent. Zeng and Zhao (2009) proved that the agglomeration
power of industry is a potential cause of enterprise transfer. Sanna-
Randaccio and Sestini (2012) showed that increasing environmental
taxes in a single country can lead production to shift to countries with
lower environmental regulations, but if a country has a relatively larger
market size, increasing the intensity of large environmental regulations
will not lead to the transfer of enterprises. Ederington, Levinson, and
Minier (2005) divided the study sample into industries with relatively
low and high transportation costs and found that the industry with the
highest cost was also the least geographically mobile. Elliott and Zhou
(2012) showed that stricter ERP may lead to FDI inflows. Researchers
supporting the pollution haven hypothesis have demonstrated its exis­
tence through various studies. Dean, Lovely, and Wang (2009) found
that the highly polluting industries in Hong Kong, Macao and Taiwan
will be attracted by weak environmental standards by estimating the
determinants of the location choice of Sino-foreign joint ventures.
Dijkstra, Mathew, and Mukherjee (2011) found that if domestic envi­
ronmental regulations are more demanding than the regulations in
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Computers & Industrial Engineering 148 (2020) 106748
foreign countries, a company is more likely to move to the countries
with lower environmental costs. Wagner and Timmins (2008) used
panel data from German manufacturing FDI outflows, and the pollution
shelter hypothesis was strongly supported in most polluting industries,
such as chemicals and paper.
The intensity of environmental regulation differs not only across
countries but also across regions of the same country, especially in
China. Under the background of successively enacting ERP at all levels
of government to improve environmental issues, the pollution haven
hypothesis has been applied to the Chinese scenario. Zheng and Shi
(2017) analyzed the impact of multiple ERP on the transfer of polluting
industries using a multifactor governance framework involving multiple
entities and policy instruments. The effectiveness of the pollution haven
hypothesis was related to the type and industrial characteristics of ERP.
Generally, the highly mobile polluting industry tends to shift to areas
with loose environmental regulation, and the weakly mobile polluting
industry does not show the effect of pollution haven (Dou & Han, 2019).
Cai, Chen, and Gong (2016), Cai, Lu, Wu, and Yu (2016) used county-
level data to verify the tendency of polluting enterprises to move from
province inside to the administrative boundary, revealing the spillover
effects of transboundary pollution. Liu (2013) conducted field research
on more than a dozen cities in China, showing that polluting enterprises
are mainly transferred within cities; actually, the most polluting enter­
prises and the lowest-income enterprises will move to other regions, and
China’s polluting enterprises will not move to other countries. Zhu et al.
(2014) proposed a roughly U-shaped relationship between enterprise
transfer and firm size, which is the result of the interaction between
political environment, regional hub effect and environmental
regulation.
As the “capital economic circle” of China, Beijing-Tianjin-Hebei is
the largest and most dynamic region in the north, but the rapid devel­
opment of industry has caused adverse effects on the environment. In
the face of increasingly strict ERP, Duvivier and Xiong (2013) found that
pollution-intensive industries in Hebei Province have transboundary
pollution problems from inland counties to border counties. The loca­
tion choice of the industrial transfer of Beijing-Tianjin-Hebei is affected
by factors such as synergy, cross-border pollution, and environmental
preferences of residents. The areas with high environmental importance
have the power to shift the industry to areas with low environmental
importance. Beijing-Tianjin-Hebei and the surrounding regions are the
key implementation areas for China’s air pollution joint prevention and
control, and the environmental regulation policy requirements and
regulatory targets are relatively clear. However, there is still a large
research gap in understanding the impact of environmental regulation
on industrial transfer in the Beijing-Tianjin-Hebei region and the sur­
rounding regions. The reasons are as follows: First, many scholars
believe that environmental regulation is not a key factor affecting in­
dustrial transfer. It is therefore only used as a control variable in model
analysis, and no detailed discussions are conducted. Second, due to
China’s hosting of the Olympic Games in 2008, a number of enterprises,
such as Shougang, began to relocate in 2005, and industrial transfer has
occurred in this region since then; however, at the national and regional
levels, attention was paid to environmental governance issues in 2013.
During the eight-year time interval, the impact of environmental regu­
lation on industrial transfer was beginning to bear fruit. In this
circumstance, this paper selects Beijing-Tianjin-Hebei and the sur­
rounding regions (Henan, Shandong, Shanxi) as research areas and try to
explore the impact of environmental regulation on the transfer of
pollution-intensive industries in the context of regional air pollution
linkage management.
In summary, there are three shortcomings in the existing research:
(1) the effect of informal environmental regulation on the transfer of
pollution-intensive industries has not been fully demonstrated; (2) there
is little analysis of the impact of enforcement of local government
environmental regulations; and (3) the research on the relationship
between environmental regulation in Beijing-Tianjin-Hebei and the
G. Zhang et al. Computers & Industrial Engineering 148 (2020) 106748

Table 1
Industrial transfer indicators of Beijing-Tianjin-Hebei and the surrounding regions.
Beijing Tianjin Hebei Henan Shandong Shanxi

ITC ITI ITC ITI ITC ITI ITC ITI ITC ITI ITC ITI

2016 − 33.49 − 0.0002 216.55 0.0010 − 188.87 − 0.0009 487.04 0.0023 169.69 0.0008 − 261.13 − 0.0012
2015 − 175.23 − 0.0009 259.68 0.0013 − 209.97 − 0.0010 577.17 0.0029 367.78 0.0018 − 424.41 − 0.0021
2014 − 27.57 − 0.0001 221.20 0.0012 − 249.19 − 0.0013 841.93 0.0045 587.86 0.0031 − 201.49 − 0.0011
2013 − 0.85 − 4.8E-06 321.76 0.0018 186.32 0.0011 736.37 0.0042 730.42 0.0041 117.50 0.0007
2012 − 21.20 − 0.0001 440.29 0.0027 376.73 0.0023 1022.61 0.0062 607.51 0.0037 136.61 0.0008
2011 − 86.90 − 0.0006 395.35 0.0026 284.65 0.0019 1143.23 0.0075 292.31 0.0019 223.26 0.0015
2010 51.99 0.0004 318.03 0.0023 63.36 0.0005 712.68 0.0052 33.32 0.0002 198.27 0.0015
2009 − 3.99 − 3.3E-05 303.47 0.0025 42.86 0.0004 533.58 0.0044 534.40 0.0044 − 315.84 − 0.0026
2008 − 209.82 − 0.0019 244.67 0.0022 83.86 0.0008 794.46 0.0071 336.20 0.0030 − 89.18 − 0.0008
2007 − 40.82 − 0.0004 54.41 0.0005 8.51 0.0001 602.34 0.0060 178.65 0.0018 79.96 0.0008
2006 − 54.09 − 0.0006 65.07 0.0007 140.66 0.0016 552.34 0.0063 406.07 0.0046 65.07 0.0007
2005 − 11.08 − 0.0001 111.81 0.0014 169.70 0.0022 − 599.98 − 0.0077 511.39 0.0066 95.16 0.0012
2004 103.03 0.0015 137.65 0.0020 125.82 0.0018 − 432.29 − 0.0062 629.36 0.0090 96.86 0.0014
SUM − 510.03 3089.94 834.44 6971.48 5384.95 − 279.36

surrounding regions and the transfer of pollution-intensive industries is
far from sufficient. Targeting Beijing-Tianjin-Hebei and the surrounding
regions (Henan, Shandong, Shanxi), this paper combines government-
led formal environmental regulation with public-led informal environ­
mental regulation, and considers the enforcement of local government
environmental regulations, to empirically study the relationship be­
tween environmental regulation and pollution-intensive industry
transfer.
3. Analysis of the status-quo of industrial transfer
3.1. Definition of pollution-intensive industries
Pollution-intensive industries include many industries, mostly capi­
tal and labor factors. Environmental pollution is an important attribute
of pollution-intensive industries. For the definition of pollution-
intensive industries, there is currently no uniform classification stan­
dard. In the existing research, pollution-intensive industries are deter­
mined by the pollution control cost of the industry (Tobey, 1990), the
intensity of pollution emissions and the scale of pollution emissions
(Becker & Henderson, 2000; Lucas, Wheeler, & Hettige, 1992).
China’s interregional industrial transfer is mainly based on the
transfer of industrial manufacturing. According to the scope of key in­
dustrial pollution sources announced in the “First National Pollution
Sources General Survey Plan” promulgated by the State Council in 2007
and the emissions of major gas pollutants published in the “First Na­
tional Pollution Source Survey Bulletin” promulgated in 2010, consid­
ering the availability and integrity of data, this paper selects five
industries, namely, papermaking and paper products industry, chemical
raw materials and chemical products manufacturing industry, ferrous
metal smelting and rolling processing industry, nonmetallic mineral
products industry, and the petroleum processing, coking and nuclear
fuel processing industry, as representative pollution-intensive
industries.
3.2. Method for measuring industrial transfer amount
Industrial transfer can be divided into absolute industrial transfer
and relative industrial transfer. Due to the lack of complete absolute
industry transfer data in China, this paper constructs indicators for
relative industrial transfer. The calculation methods for the indicators of
relative industrial transfer are mainly divided into four types: (1)

Fig. 1. The transfer of pollution-intensive industries in Beijing-Tianjin-Hebei and the surrounding regions.

4
G. Zhang et al.
Fig. 2. Diagram of the effect of formal environmental regulation on pollution-intensive industries.
comparing the relevant share indicators reflecting the indirect quantity
of industrial transfer between regions, as in Shen et al. (2017), using the
ratio of the output value of pollution-intensive industries in each city to
the province’s output value to indicate industrial transfer (Shen et al.,
2017); (2) constructing an index reflecting the industrial transfer and
indirectly judging the industrial transfer by calculating the increase and
decrease in the index at different times and in different regions,
commonly using indexes such as the Herfindahl index, industrial
gradient coefficient, industry concentration index and regional special­
ization index to derive the interregional transfer; (3) using regional
input–output data to calculate specific data of industrial transfer; and (4)
using the deviation-share method to study industrial transfer issues.
Based on the deviation share method, Ai-Hua and Fan (2018) con­
structed an improved regional industrial transfer and pollution transfer
model to quantitatively measure industrial transfer and pollution
transfer between regions in China.
We use the deviation share method and the industrial transfer
acceptance index to construct different indicators for industrial transfer,
indicating the transfer of polluting industries in Beijing-Tianjin-Hebei
and the surrounding regions. The indicators for industrial transfer are
shown in Table 1.
The industrial transfer component (ITC) represents the economic
value of region i during the [0, t] time period. and ITC > 0 indicates that
the economic quantity of industry j in region i increases, and there is a
phenomenon of industrial transfer. ITC = 0 indicates that the economic
quantity of industry j in area i has not changed, and there is no industrial
transfer. ITC < 0 indicates that the economic quantity of industry j in
area i is reduced, and there is a phenomenon of industry being trans­
ferred out. The industrial transfer index (ITI) indicates that region i
undertakes the average percentage of industrial transfer in the [0, t] time
period, ITI > 0 indicates that region i undertakes the transfer of industry
j, ITC = 0 indicates that region i has not undertaken the transfer of in­
dustry j, and ITC < 0 indicates that industry j of region i has been
transferred out. Table 1 shows that the industrial transfer component of
Beijing-Tianjin-Hebei and the surrounding regions and the industrial
transfer acceptance index are completely consistent with the overall
industrial transfer situation of each province. In 2004–2016, Tianjin and
Shandong consistently undertake industrial transfer, except for Beijing,
which basically shows the state of industrial transfer. Although Hebei
and Shanxi experience a large amount of industrial migration in
2014–2016, the overall situation of industrial transfer in Beijing-Tianjin-
Hebei and the surrounding regions is still observable (see Fig. 1).
5
Computers & Industrial Engineering 148 (2020) 106748
4. Variable measurement and model construction
The data in this paper come from the China Statistical Yearbook,
China Industrial Statistical Yearbook, China Environmental Yearbook,
economic statistics yearbooks and scientific and technical statistical
yearbooks of Beijing-Tianjin-Hebei and the surrounding regions. To
ensure data consistency, the data were examined and compared using
different yearbooks. Considering the impact of price volatility, all data
were deflated on a 2005 basis.
We first explore the direct impact of formal environmental regula­
tion on the transfer of pollution-intensive industries and then explores
the impact of the interaction between formal environmental regulation
and the local government’s environmental regulation enforcement on
the transfer of pollution-intensive industries. Finally, we explore the
joint impact of formal environmental regulations and the interactions
between formal environmental regulations and local government envi­
ronmental regulation enforcement on the transfer of pollution-intensive
industries. The theoretical framework is shown in Fig. 2.
4.1. Dependent variable
The pollution-intensive industry transfer in this paper refers to the
spatial transfer and distribution changes caused by environmental
regulation differences, comparative advantages of resource endow­
ments, and different market sizes. These changes may be the result of
interregional industrial transfer or the result of industrial restructuring.
Although it is difficult to distinguish the change in ratio caused by in­
dustrial spatial transfer or local industrial structure adjustment, local
industrial structure adjustment can be controlled in statistical regres­
sion. The direction and extent of the long-term regional transfer of
pollution-intensive industries can be estimated (Dou & Han, 2019). This
paper uses the industrial output value and the proportion of five
pollution-intensive industries to the regional GDP as the dependent
variable.
4.2. Independent variable
We analyze and quantify the environmental regulation policy texts
promulgated by the central and local governments, construct central and
provincial environmental regulation intensity indicators, and then
calculate the formal environmental regulation intensity indicators as
independent variables.
We collect the ERP independently or jointly issued by more than 40
institutions, including the National People’s Congress, the State Council,
G. Zhang et al.
Fig. 3. Construction mechanism of environmental regulation intensity index.
the National Development and Reform Commission, and the Ministry of
Environmental Protection, as well as the administrative divisions and
subordinate departments, and establish a database of ERP. Considering
that the relocation of Shougang in 2005 was a landmark event in Beijing-
Tianjin-Hebei and the surrounding regions, the joint prevention and
control of air pollution has become the focus of environmental regula­
tion in these regions. Combined with the time delay and availability of
policies, we conducted a quantitative study on ERP covering the target
of air pollution prevention in 2004–2016, including 1,100 ERP
promulgated by the central government and 873 policies issued by
Beijing-Tianjin-Hebei and the surrounding regions. The ERP include 215
in Beijing, 141 in Tianjin, 232 in Hebei, 62 in Henan, 62 in Shandong,
and 161 in Shanxi.
For the quantitative criteria and quantitative steps of ERP, we use the
quantitative method of Zhang, Wu, and Zhang (2004). Based on the
external attributes and internal structure of the policy text, it is
measured from the three dimensions of policy strength, policy measure
Fig. 4. Formal environmental regulation intensity in Beijing-Tianjin-Hebei and the surrounding regions.
6
Computers & Industrial Engineering 148 (2020) 106748
and policy goal, and given 1–5 points according to the degree of
importance attached to each dimension by ERP. Pollution prevention is
one of the goals to be achieved by the government when promulgating
ERP. It is also an important factor in constructing the environmental
regulation intensity index, which is achieved through strict control of
pollution emissions and other methods. According to the policy quan­
titative standards, we use the environmental regulation policy strength,
six policy measures, and the “pollution prevention” goal to construct an
environmental regulation intensity indicator. The construction mecha­
nism is shown in Fig. 3.
The calculation of the formal environmental regulation intensity
index is expressed by formula (1). Since the central ERP and the local
ERP play a regulatory role in pollution-intensive industries, the sum of
the intensities of the two is taken as the formal environmental regulation
intensity.
G. Zhang et al. Computers & Industrial Engineering 148 (2020) 106748

Table 2 environmental regulation intensity. We will explore the impact of the

Variable definition. interaction between local government environmental regulation
Variable Variable Description enforcement and formal environmental regulation intensity on the
name transfer of pollution-intensive industries.
Dependent lnPIS Industrial transfer Represented by industrial How to measure the local government environmental regulation
variable (logarithmic form) and pollution-intensive enforcement has always been the focus of research. Local governments
industries as a percentage mainly influence the microeconomic activities of enterprises through
of regional GDP. two types of administrative intervention: direct investment and sub­
Independent FER Formal environmental According to the method of
variable regulation intensity Zhang et al. (2019)
sidies (Hsieh & Klenow, 2009). Many studies have used indicators such
(logarithmic form) as pollution reduction investment and the number of environmental
lnPE Local government’s Constructed by the entropy protection agencies to characterize the local government environmental
environmental weight method, the regulation enforcement (Bu, Liu, Wagner, & Yu, 2013). Considering the
regulation measurement index
administrative means implemented by local governments in the process
enforcement consists of the total
(logarithmic form) investment amount in of implementing environmental regulation, by consulting official data,
regional environmental we finally select two indicators: the total investment amount in regional
pollution control and the environmental pollution control and the amount of sewage charges
amount of sewage charges collected to measure local government environmental regulation
collected.
Control IER Informal Constructed by the entropy
enforment, and use entropy method to construct it.
variable environmental weight method, the
regulation intensity measurement index 4.3. Control variables
(logarithmic form) consists of the total
number of regional
In addition to considering the impact of formal environmental
environmental pollution
letters, environmental regulation intensity on the transfer of pollution-intensive industries, this
pollution disputes, and paper will include six control variables: informal environmental regu­
proposals proposed by the lation intensity (IER), economic development level (lnGDP), degree of
CPPCC on environmental
openness (lnFDI), infrastructure capital stocks (lnICS), R&D investment
protection.
lnGDP Economic Expressed by per capita
(lnRD) and industrial agglomeration (lnIA). The description of the var­
development level GDP. iables is shown in Table 2.
(logarithmic form) Informal environmental regulation can play a complementary role in
lnFDI Degree of openness The actual use of foreign influencing the transfer of pollution-intensive industries. The influ­
(%) (logarithmic direct investment in the
encing factors are complex and difficult to quantify, and there is no
form) region as a percentage of
the regional GDP. uniform indicator to measure it. Kathuria (2007) used the number of
lnICS Infrastructure capital Refer to the measurement times the press exposed pollution incidents as a representative variable
stock (logarithmic method of Zhang et al. of the intensity of informal environmental regulation. Goldar and
form) (2004), using the Banerjee (2004) used voter turnout in parliamentary elections and the
perpetual inventory
method.
growth rate of education diffusion to measure the intensity of informal
lnRD R&D investment (%) The proportion of scientific environmental regulation. Langpap and Shimshack (2010) noted that
(logarithmic form) and technological public supervision and public law enforcement have played a significant
expenditures in the role in water pollution control in the United States as informal envi­
province’s fiscal
ronmental regulation. This paper selects the number of letters about
expenditure to the general
budget expenditure. environmental pollution, the number of visits to environmental pollu­
lnIA Industrial Expressed by location tion disputes and the number of proposals of the CPPCC on environ­
agglomeration (%) entropy, calculation mental protection as the measurement indicators of informal
(logarithmic form) method: IAit = environmental regulation intensity (IER). The informal environmental
(PEit /Eit )/(PEt /Et ).
regulation intensity in Beijing-Tianjin-Hebei and the surrounding re­
gions is shown in Fig. 5.
(
∑n
)/ The level of economic development (lnGDP) refers to the scale, speed
FERt = petj × pgtj × pmtj n, t ∈ [2004, 2016], (1) and level of economic development of a country or region, expressed in
terms of regional capita GDP (Dou & Han, 2019). The degree of openness
j=1

(lnFDI) refers to the degree to which a country or region’s economy is

Among them, petj indicates the strength of each policy in the t-th
open to the outside world, as shown by the degree of openness of the
year; pgtj indicates the importance each policy attaches to its pollution
market. This paper selects the proportion of the region’s actual use of
prevention goal, that is, the score of pollution prevention in ERP; and
foreign direct investment in the proportion of regional GDP to indicate
pmtj indicates the total score of policy measures for each policy in the t-th
the degree of openness (Cai, Chen, et al., 2016; Cai, Lu, et al., 2016;
year, which is obtained by summing the scores of the six individual
Cheng et al., 2018). Infrastructure can be divided into economic infra­
measures. In addition, the number n of effective ERP in the t-th year is
structure and social infrastructure. This paper uses the measurement
added as a divisor to eliminate the influence of different provinces on the
method of Zhang et al. (2004). Based on 2005, the perpetual inventory
environmental regulation intensity due to the difference in the number
method is used to calculate the economic infrastructure capital stock as a
of issued policies in different years (see Fig. 4).
control variable. R&D investment (lnRD) is the necessary cost for en­
Environmental regulation enforcement is the direct reflection of the
terprises’ technology innovation upgrading so as to improve production
behavior of local government in implementing environmental regula­
efficiency and reduce pollutant emissions (Parry et al., 2003). This paper
tion and is another important factor affecting the transfer of pollution-
selects the proportion of scientific and technological expenditures in the
intensive industries. In many cases, it is not the policy itself that fails
fiscal expenditures of each province to the general budget expenditures
to achieve the expected goal, but the policy cannot be implemented
to indicate R&D investment. Industrial agglomeration (lnIA) is an indi­
effectively. The intervention of the local government’s environmental
cator used to measure the extent of industrial agglomeration and can be
regulation enforcement may change the impact of the formal
used to determine the concentration and specialization of a particular

7
G. Zhang et al. Computers & Industrial Engineering 148 (2020) 106748

Fig. 5. Informal environmental regulation intensity in Beijing-Tianjin-Hebei and the surrounding regions.

industry in a region.
Table 3
Descriptive statistics of variables.
4.4. Model construction
Variable Mean Standard deviation Minimum Median Maximum

lnPIS − 0.744 0.355 − 1.582 − 0.647 − 0.231

Environmental regulation has spatial dependence and spatial spill­
FER 4.102 0.436 2.998 4.195 5.083
over effects due to industrial agglomeration (Cheng et al., 2018). The lnPE 4.710 0.854 2.952 4.732 6.309
neglect of spatial effects is prone to endogeneity problems caused by IER 7.974 1.165 5.125 8.092 9.789
spatial dependence in data, leading to errors in estimation results. This lnGDP − 8.034 0.582 − 9.214 − 8.046 − 6.926
paper attempts to apply spatial econometric analysis to reduce the lnFDI − 3.652 0.699 − 5.235 − 3.933 − 2.413
lnICS 10.808 0.615 9.759 10.725 12.098
impact of such problems. lnRD − 3.93 0.584 − 4.819 − 3.986 − 2.72
Before establishing the spatial econometric model of environmental lnIA 0.113 0.352 − 0.734 0.207 0.621
regulation and industrial transfer, it is necessary to test the existence of
spatial effects. This paper applies the LM test method (Anselin, Bera,
Florax, & Yoon, 1996), regresses the nonspatial OLS model and di­ weight, i.e.,
agnoses the error or lag spatial dependence. When the results of LM-err ⎧
and LM-lag are not statistically significant, a traditional panel model is ⎨ 1 ,i ∕
⎪
=q
w = diq (3)
used. If any of them is significant, a spatial metering model is used. ⎪
⎩
0, i = q
According to the test results, this paper constructs the spatial Durbin
model (SDM). The spatial Durbin model can identify the influence of not
where diq is the Euclidean distance between the two provinces i and q.
only the local independent variable but also other regions’ independent
The second type is the geographically adjacent spatial weight matrix.
and dependent variables on the dependent variable. The basic model is
For example, if province i is adjacent to province q, then w = 1; if
shown in formula (2):
province i is not adjacent to province q, then w = 0. The third type is the
∑
n ∑
n ∑
n
economic geospatial weight matrix, which is weighted according to per
lnYit = ρ Wij lnYjt + βXit + θk Wij Xjt + δCit + ∅ Wij Cjt + μi + λt
j=1 j=1 j=1
capita GDP, while considering the geographical distance (Euclidean
distance); then the formula is
+ εit
(2) w= ( ∑n )
1
( ∑n ) diq , n = [2004, 2016], (4)
avg t pGDP i
− avg t pGDP q
where Y is the dependent variable, X is the independent variable, C is the
set of control variables, ρ is the spatial autoregressive coefficient, 5. Empirical analysis
describing the influence of other regional dependent variables on the
local dependent variable, β and δ describe the influence of the local Table 3 presents the descriptive statistical results (logarithm) of the
independent variables and control variables on the local dependent dependent variable lnPIS, the independent variables FER and lnPE, and
variables, θ and φ describe the influence of other regional independent the control variables IER, lnGDP, lnFDI, lnIGS, lnRD and lnIA. The stan­
variables and control variables on the local dependent variables, W is dard deviation of all variables is relatively small, indicating that the
the spatial weight matrix, μi is the individual fixed effect, λt is the time variation process of each variable is relatively stable during 2004–2016,
fixed effect, and εit is the random error term. but the difference between the mean, the minimum and the maximum is
This study adopts three methods to construct a 6 × 6-dimensional large, indicating that the difference between the variables is significant.
space weight matrix. The first type is the inverse distance geospatial

8
G. Zhang et al. Computers & Industrial Engineering 148 (2020) 106748

Table 4
Coefficient correlation test.
lnPIS FER lnPE IER lnGDP lnFDI lnICS lnRD lnIA

lnPIS 1
FER 0.033 1
lnPE 0.229** − 0.171 1
IER 0.0670 − 0.377*** − 0.127 1
lnGDP − 0.402*** − 0.023 0.063 − 0.384*** 1
lnFDI − 0.182 − 0.052 − 0.310*** − 0.163 0.725*** 1
lnICS 0.316*** − 0.247** 0.810*** 0.0600 0.088 − 0.134 1
lnRD − 0.646*** − 0.081 − 0.268** − 0.196* 0.792*** 0.743*** − 0.207* 1
lnIA 0.999*** 0.026 0.203* 0.0920 − 0.425*** − 0.188* 0.300*** − 0.654*** 1

Note: ***, ** and * represent p < 1%, p < 5% and p < 10%, respectively.

Table 5
Industrial regression estimation results based on the inverse distance geospatial weight matrix.
(1) (2) (3)

Pooled OLS SDM Pooled OLS SDM Pooled OLS SDM

Contant − 0.773*** − 0.746*** − 0.673***

(0.0465) (0.0418) (0.0559)
FER 0.0029 0.0008 − 0.0099** 0.0035
(0.0035) (0.0016) (0.0036) (0.0026)
FERlnPE 0.0020*** − 0.0002 0.0031*** − 0.0007
(0.0004) (0.0003) (0.0003) (0.0005)
IER − 0.0044** 0.0020* − 0.0025** 0.0020* − 0.0028*** 0.0014
(0.0014) (0.0011) (0.0009) (0.0011) (0.0007) (0.0011)
lnGDP 0.0212*** − 0.0318 0.0172*** − 0.0326 0.0155*** − 0.0347
(0.0023) (0.0234) (0.0037) (0.0234) (0.0039) (0.0227)
lnFDI − 0.0064 − 0.0014 − 0.0032 − 0.0007 − 0.0015 0.0010
(0.0048) (0.0023) (0.0037) (0.0022) (0.0030) (0.0024)
lnICS 0.0059* 0.0095 − 0.0010 0.0151 − 0.0064 0.0182
(0.0025) (0.0293) (0.0026) (0.0296) (0.0035) (0.0287)
lnRD − 0.0054 − 0.0007 − 0.0017 − 0.0019 − 0.0014 − 0.0022
(0.0090) (0.0033) (0.0070) (0.0033) (0.0052) (0.0032)
lnIA 1.012*** 1.020*** 1.013*** 1.017*** 1.014*** 1.018***
(0.0067) (0.0236) (0.0043) (0.0234) (0.0026) (0.0228)
W*FER 0.0014 0.0158**
(0.0058) (0.0080)
W*FERlnPE − 0.0016 − 0.0037**
(0.0011) (0.0015)
W*IER 0.0052 0.0044 0.0047
(0.0036) (0.0034) (0.0035)
W*lnGDP − 0.1280 − 0.1450 − 0.150*
(0.0931) (0.0935) (0.0911)
W*lnFDI − 0.0126 − 0.0079 0.0009
(0.0079) (0.0084) (0.0093)
W*lnICS 0.0424 0.0540 0.0640
(0.0795) (0.0797) (0.0775)
W*lnRD − 0.0076 − 0.0119 − 0.0094
(0.0108) (0.0106) (0.0104)
W*lnIA 0.1220 0.0954 0.1100
(0.1980) (0.1990) (0.2000)
Spatial rho − 0.0325 − 0.0321 − 0.0463
(0.1920) (0.1920) (0.1930)
Hausman test 22.06*** 29.90*** 37.26***
LM-error 58.185*** 56.097*** 48.641***
Robust LM-error 48.929*** 48.592*** 42.321***
LM-lag 34.028*** 24.439*** 21.317***
Robust LM-lag 24.772*** 16.933*** 14.998***
LR test spatial effect 122.23*** 148.97*** 113.32***
Spatial fixed effect NO YES NO YES NO YES
Time period fixed effect NO YES NO YES NO YES
R2 0.999 0.970 0.999 0.966 0.999 0.964

Note: ***, ** and * represent p < 1%, p < 5% and p < 10%, respectively.

The changes between different variables describe the different effects of
the independent variables and control variables on the dependent var­
iable and describe the influences of policy, economic, social, scientific
and technological factors on the transfer of pollution-intensive in­
dustries in Beijing-Tianjin-Hebei and the surrounding regions.
The Pearson correlation coefficient test method was used to analyze
the correlation between variables. Table 4 shows that the correlation
coefficient between lnPIS and FER is not significant, the correlation is
weak (correlation coefficient is 0.033 and p > 0.1), and the correlation
coefficient between lnPIS and lnPE is significant and has a certain cor­
relation (correlation coefficient is 0.229 and p < 0.05). Considering the
practical significance, this paper believes that the ERP promulgated by
the government will have a certain degree of impact on the transfer of
pollution-intensive industries, so the model needs further analysis.

9
 G. Zhang et al.
Table 6
Regression results of pollution-intensive industries based on inverse distance geospatial weight matrix.
lnPA lnCP lnFS lnNI lnCN

(1) (2) (3) (1) (2) (3) (1) (2) (3) (1) (2) (3) (1) (2) (3)

FER − 0.004 0.051 0.079 0.0632 − 0.005 − 0.280*** − 0.0638* − 0.062 0.125** − 0.056
(0.043) (0.072) (0.053) (0.0906) (0.058) (0.088) (0.033) (0.056) (0.049) (0.077)
FERlnPE − 0.002 − 0.012 0.015 0.00397 0.017 0.0621*** − 0.009 0.0002 0.0375*** 0.0446***
(0.008) (0.014) (0.010) (0.0171) (0.011) (0.017) (0.006) (0.011) (0.008) (0.015)
IER 0.033 0.034 0.033 − 0.0674* − 0.060 − 0.0649* 0.0723* 0.062 0.0881** 0.0533** 0.0457** 0.0543** − 0.109*** − 0.0936*** − 0.0837***
(0.031) (0.030) (0.031) (0.038) (0.037) (0.0383) (0.041) (0.039) (0.037) (0.023) (0.023) (0.024) (0.035) (0.031) (0.032)
lnGDP 0.097 − 0.023 − 0.013 4.995*** 5.011*** 5.010*** 6.736*** 7.155*** 7.180*** 1.920*** 1.880*** 1.908*** 1.109 1.268* 1.310**
(0.642) (0.654) (0.642) (0.781) (0.792) (0.788) (0.853) (0.840) (0.768) (0.487) (0.499) (0.494) (0.723) (0.666) (0.662)
lnFDI 0.182*** 0.176*** 0.186*** − 0.073 − 0.103 − 0.0842 0.330*** 0.345*** 0.250*** 0.119** 0.144*** 0.116** 0.075 − 0.008 − 0.038
(0.061) (0.061) (0.066) (0.076) (0.076) (0.0840) (0.083) (0.081) (0.082) (0.047) (0.048) (0.052) (0.071) (0.064) (0.071)
lnICS − 1.861** − 1.760** − 1.733** − 3.304*** − 3.395*** − 3.363*** − 3.581*** − 4.115*** − 4.283*** 2.953*** 3.009*** 2.957*** − 3.454*** − 3.894*** − 3.955***
(0.787) (0.804) (0.791) (0.993) (1.016) (1.012) (1.127) (1.129) (1.041) (0.620) (0.642) (0.636) (0.912) (0.846) (0.843)
lnRD − 0.344*** − 0.342*** − 0.347*** − 0.278** − 0.265** − 0.270** − 0.294** − 0.271** − 0.243** − 0.230*** − 0.234*** − 0.228*** 0.029 0.094 0.099
(0.088) (0.090) (0.089) (0.110) (0.112) (0.112) (0.120) (0.119) (0.109) (0.068) (0.070) (0.069) (0.102) (0.095) (0.094)
lnIA 0.900 0.984 0.951 0.829 0.867 0.850 − 1.587* − 1.692** − 1.645** − 1.066** − 1.037** − 1.053** 3.421*** 3.605*** 3.571***
(0.644) (0.649) (0.637) (0.790) (0.796) (0.792) (0.861) (0.842) (0.769) (0.488) (0.496) (0.490) (0.730) (0.667) (0.663)
W*FER − 0.099 − 0.146 0.054 − 0.0112 − 0.008 − 0.250 − 0.208* − 0.240 0.252 − 0.348
(0.156) (0.220) (0.195) (0.278) (0.213) (0.270) (0.121) (0.173) (0.181) (0.234)
W*FERlnPE − 0.004 0.011 0.019 0.0164 0.023 0.067 − 0.024 0.008 0.113*** 0.157***
10

(0.029) (0.041) (0.036) (0.0512) (0.038) (0.050) (0.022) (0.032) (0.030) (0.043)
W*IER − 0.037 − 0.006 − 0.047 − 0.180 − 0.145 − 0.176 0.064 0.016 0.120 0.080 0.080 0.080 − 0.210* − 0.154 − 0.169*
(0.096) (0.094) (0.095) (0.119) (0.117) (0.120) (0.131) (0.125) (0.118) (0.074) (0.073) (0.075) (0.111) (0.098) (0.101)
W*lnGDP − 1.853 − 2.081 − 2.390 10.11*** 10.49*** 10.19*** 16.21*** 17.61*** 18.61*** 2.519 2.356 2.473 − 4.893* − 3.230 − 3.269
(2.619) (2.678) (2.649) (3.140) (3.203) (3.195) (3.390) (3.352) (3.069) (1.958) (2.017) (2.003) (2.923) (2.714) (2.720)
W*lnFDI 0.308 0.310 0.251 − 0.100 − 0.171 − 0.158 0.947*** 0.957*** 0.766** 0.512*** 0.615*** 0.481** 0.735*** 0.317 0.139
(0.212) (0.229) (0.256) (0.265) (0.289) (0.325) (0.289) (0.304) (0.316) (0.165) (0.180) (0.201) (0.253) (0.248) (0.278)
W*lnICS − 4.283** − 3.951* − 4.059* − 7.078*** − 7.183*** − 7.208*** − 13.93*** − 15.37*** − 15.34*** 7.475*** 7.616*** 7.475*** − 5.396** − 6.513*** − 6.719***
(2.137) (2.169) (2.134) (2.662) (2.710) (2.698) (3.181) (3.176) (2.940) (1.724) (1.774) (1.755) (2.464) (2.277) (2.266)
W*lnRD − 1.142*** − 1.110*** − 1.093*** − 0.704* − 0.728** − 0.697* − 0.096 − 0.065 − 0.214 − 0.632*** − 0.582** − 0.623*** 0.281 0.412 0.363
(0.296) (0.296) (0.294) (0.360) (0.361) (0.363) (0.393) (0.383) (0.353) (0.226) (0.228) (0.227) (0.339) (0.308) (0.309)
W*lnIA 1.499 1.609 2.459 − 2.701 − 3.272 − 2.652 − 5.391* − 5.873** − 8.042*** − 5.182*** − 4.961*** − 5.027*** 10.22*** 10.35*** 10.57***
(2.058) (2.100) (2.136) (2.543) (2.606) (2.667) (2.763) (2.740) (2.584) (1.641) (1.680) (1.700) (2.342) (2.171) (2.220)

Computers & Industrial Engineering 148 (2020) 106748

Spatial rho − 1.050*** − 1.053*** − 1.045*** − 0.204 − 0.207 − 0.191 − 0.480** − 0.471** − 0.494** − 0.469** − 0.465** − 0.463** − 0.815*** − 0.944*** − 0.917***
(0.196) (0.196) (0.196) (0.226) (0.226) (0.226) (0.231) (0.230) (0.224) (0.208) (0.210) (0.210) (0.199) (0.185) (0.191)
Hausman 3214.3*** 28.59*** 17.41** 27.76*** 31.34*** 623.44*** 37.47*** 37.64*** 53.24*** 120.50*** 62.67*** 59.85*** 35.03*** 137.25*** 23.65***
test
Spatial fixed YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES
effect
Time period YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES
fixed effect
R2 0.144 0.124 0.136 0.056 0.05 0.056 0.065 0.062 0.044 0.088 0.09 0.09 0.002 0.007 0.007

Note: ***, ** and * represent p < 1%, p < 5% and p < 10%, respectively.
G. Zhang et al.
A stationarity test is performed on each variable to avoid false
regression. In this paper, a long panel of small N and large T is con­
structed, and the LLC panel unit root test method is selected to test the
data stationarity. In the LLC test with only the constant term, the test
results of the dependent variable and the independent variables in the
lag phase are stable. In the LLC test with the constant term and trend
term, the dependent variable and the independent variables are also
stable in the lag phase test. For the panel stationarity test, as long as the
test result of one mode rejects the null hypothesis of the unit root of the
panel, the variables in the panel can be considered to be stable, and the
model can be empirically analyzed.
Table 5 shows that the spatial Hausman test results of the three
models are significant at the 1% significance level, so the spatial fixed
effects model is used for the regression. In addition, the likelihood ratio
(LR) test results of the three models are significant at the 1% significance
level. This paper includes the bidirectional fixed effects in the model.
Model (1) explores the direct impact of formal environmental regu­
lation on overall industrial transfer. The main effect estimation results
show that the formal environmental regulation of Beijing-Tianjin-Hebei
and the surrounding regions has no obvious effect on the overall in­
dustrial transfer in the region (the regression coefficient of FER is
0.000751, not significant); that is, the effectiveness of ERP will not lead
to industrial transfer. Informal environmental regulation has a relatively
weak positive impact on the overall industrial transfer in the region (the
regression coefficient of IER is 0.00198, p < 0.1), indicating that public
participation in environmental governance in Beijing-Tianjin-Hebei and
the surrounding regions cannot inhibit the overall industry’s increasing
trend. There is even a faint possibility of causing industries outside the
region to move into the region. Considering the spatial dependence ef­
fect, industrial transfer in Beijing-Tianjin-Hebei and the surrounding
regions will not be affected by formal environmental regulation or
informal environmental regulation in other provinces (the regression
coefficient of W*FER is 0.00135, not significant; the regression coeffi­
cient of W*IER is 0.00523, not significant) and will not be affected by
industrial transfer in other provinces (ρ = − 0.0325, not significant).
Model (2) explores the impact of the interaction between formal
environmental regulation and local government environmental regula­
tion enforcement on overall industrial transfer. The result is similar to
model (1). The interactions between the province and other provinces,
the informal environmental regulation and the industrial transfer of
other provinces have no significant effect on the industrial transfer in the
province. The informal environmental regulation of the province has a
weak positive impact on the overall industrial transfer (the regression
coefficient of IER is 0.00197, p < 0.1).
Model (3) explores the common influence of formal environmental
regulation and the interaction between formal environmental regulation
and local government environmental regulation enforcement on the
overall industrial transfer. The estimation results show that the formal
environmental regulation of Beijing-Tianjin-Hebei and the surrounding
regions, the interaction between formal environmental regulation and
local government’s environmental regulation enforcement, and
informal environmental regulation have no significant effect on the
overall industrial transfer in the region. However, the spatial depen­
dence effect of the overall industrial transfer is more significant, and it is
positively affected by the formal environmental regulation of other
provinces (the regression coefficient of W*FER is 0.0158, p < 0.05) and
the negative impact of other provinces’ interaction items (the regression
coefficient of W*FER lnPE is − 0.00366, p < 0.05), indicating that the
formal environmental regulation intensity of other provinces will pro­
mote the transfer of industry to the province. The environmental regu­
lation enforcement of local governments in other provinces will promote
the outward transfer of the province’s industry. The reason is that there
is a difference in the intensity of formal environmental regulations in the
provinces of Beijing-Tianjin-Hebei and the surrounding regions.
Although the formal environmental regulation intensity of each prov­
ince and the enforcement of local government environmental
11
Computers & Industrial Engineering 148 (2020) 106748
regulations will not cause the transfer of industries in the provinces, if
the industries outside Beijing-Tianjin-Hebei and the surrounding regions
intend to transfer to the region, they will be forced to transfer to the
provinces with lower environmental regulation intensity. However, at
this stage, the enforcement of ERP by local governments is not effective.
For the purpose of developing the economy, the provinces will reduce
the enforcement of ERP, attract industrial transfer, and cause environ­
mental regulation failure.
In addition, among the regression results of the three models, in­
dustrial agglomeration has a significant positive impact on industrial
transfer, which will lead to an increase in industries in Beijing-Tianjin-
Hebei and the surrounding regions. Beijing-Tianjin-Hebei and the sur­
rounding regions is where China’s heavy chemical industry is concen­
trated. Beijing and Tianjin have strong economic capital, a good
foundation for industrial development and a high degree of industrial
agglomeration, which are extremely attractive to the development of
industry.
Before conducting spatial measurement, the spatial effects of five
pollution-intensive industries were tested based on the inverse distance
geospatial weight matrix. The results show that all five pollution-
intensive industries are spatially correlated. The regression results of
the effect of environmental regulation on the transfer of pollution-
intensive industries are shown in Table 6.
In the regression results of the three models of the papermaking and
paper products industry, formal environmental regulation and informal
environmental regulation in the province and other provinces have no
significant impact on industrial transfer, and local government envi­
ronmental regulation enforcement have no significant impact, either.
The transfer of the industry in other provinces will have a significant
negative impact on the industrial transfer in the province (ρ1 = − 1.05, p
< 0.01; ρ2 = − 1.053, p < 0.01; ρ3 = − 1.045, p < 0.01), which shows that
environmental regulation and local government environmental regula­
tion enforcement are not important factors affecting the transfer of
papermaking and paper products in Beijing-Tianjin-Hebei and the sur­
rounding regions. The degree of openness, infrastructure construction
and R&D investment have a stronger influence on the transfer of the
industry. Shandong and Henan are provinces where China’s paper in­
dustry is concentrated. Shandong’s paper industry pays attention to the
scale of economy, constantly transforms and optimizes the industrial
structure, improves the level of technical equipment and enterprises,
and improves the degree of intensification of the industry. Many large-
scale papermaking enterprises have been formed that pay attention to
pollution prevention. Most of the paper mills in Henan are small and
medium-sized enterprises with low efficiency and serious pollution,
which are important targets for environmental regulation. However, the
papermaking and paper products industry belongs to the raw material
industry, which is basically distributed along the river. It has high re­
quirements for transportation and trade flow in China and internation­
ally. Geographical location is an important consideration for site
selection, and it is difficult for existing enterprises to transfer. In addi­
tion, investment in equipment in the papermaking and paper products
industry accounts for more than 60% of investment. Compared with
industrial transfer, industrial technology transformation and upgrading
can effectively achieve pollution prevention and control.
The regression results of the chemical raw materials and chemical
manufacturing industry show that the formal environmental regulation
of the province and other provinces and the enforcement of local gov­
ernment’s environmental regulation will not affect its industrial trans­
fer. Although the province’s informal environmental regulation has a
negative impact, the effect is very weak. The chemical raw materials and
chemical products manufacturing industry is an important basic in­
dustry and a pillar industry in the national economy, and structural
adjustment is mainly based on transformation and upgrading. Although
environmental regulation will have strong regulatory requirements for
the chemical raw materials and chemical products manufacturing in­
dustry for the goal of pollution prevention, given the reduction of
G. Zhang et al.
pollution after industrial upgrading, environmental regulation will
basically not cause industrial transfer.
Analysis of the impact of environmental regulation on the ferrous
metal smelting and rolling processing industry from the regression re­
sults of model (1) shows that the formal environmental regulation in this
region has no significant impact on industrial transfer and that informal
environmental regulation has a weak positive impact (the regression
coefficient of IER is 0.0723, p < 0.1). The formal environmental regu­
lation and informal environmental regulation in other provinces have no
significant impact on the industrial transfer, and the transfer of the in­
dustry in other provinces has a significant negative impact on the in­
dustrial transfer in the province (ρ = − 0.48, p < 0.05). The regression
results of model (2) show that the interaction between formal environ­
mental regulation and local government environmental regulation
enforcement has no significant impact on industrial transfer, and the full
intermediary effect of the local government’s environmental regulation
enforcement is not strong. Informal environmental regulations will not
have a significant impact on industrial transfer. The transfer of the in­
dustry in other provinces will have a significant negative impact on the
industrial transfer in the province (ρ = − 0.471, p < 0.05). The regres­
sion results of model (3) show that the formal environmental regulation
in this region has a relatively negative impact on industrial transfer (the
regression coefficient ofFER is − 0.280, p < 0.01), and the interaction
between formal environmental regulation and local government envi­
ronmental regulation enforcement has a significant positive impact on
industrial transfer (the regression coefficient of FERlnPE is 0.0621, p <
0.01). Therefore, ERP have the effect of forcing the ferrous metal
smelting and rolling processing industry to be transferred from the re­
gion. However, the intervention of local government environmental
regulation enforcement will weaken the policy regulatory role and
reduce the amount of industrial transfer in the region. Informal envi­
ronmental regulation in the region has a relatively positive effect on
industrial transfer (the regression coefficient of IER is 0.0881, p < 0.05),
indicating that public participation in environmental governance has an
inhibitory effect on industrial transfer. This is because the ferrous metal
smelting and rolling processing industry is an important basic industry
in Beijing-Tianjin-Hebei and the surrounding regions. It is also the most
competitive industry with a long development period, stable economy
and strong regional foundation and advantages, but its high pollution
over a long period has made the costs of resources and negative impacts
on the environment too high. China has always maintained high policy
pressure on industrial restructuring, forcing enterprises that fail to meet
environmental regulatory standards to withdraw or move to provinces
with low environmental regulation. However, from the perspectives of
regional economic development and employment, the “one size fits all”
enforcement of ERP for environmental issues is not conducive to
regional development. Local government environmental regulation
enforcement needs to be determined according to actual conditions to
alleviate the pressure caused by economic and employment problems.
Therefore, while formal environmental regulation forces the industry to
move out, local government environmental regulation enforcement and
informal environmental regulation play a buffering role. The transfer of
the ferrous metal smelting and rolling processing industry in other
provinces has a significant negative impact on the transfer of the in­
dustry in this province, indicating that there is a phenomenon of intra­
regional transfer in the ferrous metal smelting and rolling processing
industry.
From the regression results of the nonmetallic mineral products in­
dustry, it can be seen that in the three models, the informal environ­
mental regulation in the region has a significant positive impact on the
transfer of the nonmetallic mineral products industry, and the transfer of
the industry in other provinces has a significant negative impact on the
province, indicating that informal environmental regulation will pro­
mote the transfer of the nonmetallic mineral products industry to the
Beijing-Tianjin-Hebei and the surrounding regions, while the nonme­
tallic mineral products industry originally in the region will be
12
Computers & Industrial Engineering 148 (2020) 106748
transferred to the provinces that are more conducive to industrial
development in the region. The regression results of model (1) show that
the formal environmental regulations in the region and in other prov­
inces have negative impacts on the transfer of the nonmetallic mineral
products industry, but the effect is very weak and will hardly lead to
industrial transfer. The regression results of model (2) and model (3)
show that the intermediary effect of local government environmental
regulation enforcement will not only have a significant impact on the
transfer of the nonmetallic mineral products industry but also cause the
impact of formal environmental regulation to be no longer significant.
This shows that the local government’s environmental regulation
enforcement will weaken the regulatory effect of ERP on the nonmetallic
mineral products industry, and the local government’s governance effect
is not positive. The nonmetallic mineral products industry belongs to the
building materials industry. Hebei has abundant nonmetallic mineral
resources, and Beijing and Tianjin have great market demand, both of
which are necessary conditions for the development and growth of the
industry. ERP are mainly aimed at preventing pollution by technological
upgrading. As long as the industry is reformed according to relevant
requirements, there will be no situation of forced transfer. In addition,
for the purpose of balancing the economy, local governments will not
take the challenge of transferring out even if the nonmetallic mineral
products industry will produce air pollution.
The petroleum processing, coking and nuclear fuel processing in­
dustry is significantly affected by environmental regulation and local
government environmental regulation enforcement. Among the three
models, informal environmental regulation has a significant negative
impact on the transfer of the petroleum processing, coking and nuclear
fuel processing industry in the region, indicating that the public requires
the industry to be transferred from Beijing-Tianjin-Hebei and the sur­
rounding regions and has achieved practical results. The formal envi­
ronmental regulation in model (1) has a significant positive impact (the
regression coefficient of FER is 0.125, p < 0.05), which shows that the
ERP of Beijing-Tianjin-Hebei and the surrounding regions have low
regulation intensity for the petroleum processing, coking and nuclear
fuel processing industry, and enterprises in this industry located outside
Beijing-Tianjin-Hebei and the surrounding regions are transferring into
the region. From the regression results of model (2) and model (3), it can
be seen that local government environmental regulation enforcement
has a significant positive intermediate effect between formal environ­
mental regulation and industrial transfer (the regression coefficients of
FER are 0.0375 and 0.0446, respectively, p < 0.01). In addition, in
model (3), the regression coefficient of formal environmental regulation
intensity is not significant. The local government’s environmental
regulation enforcement has a full intermediate effect, which will attract
the petroleum processing, coking and nuclear fuel processing industry
outside Beijing-Tianjin-Hebei and the surrounding regions. Since the
local government’s environmental regulation enforcement in other
provinces in the region has a significant positive impact on the prov­
ince’s industrial transfer, the transfer of the petroleum processing,
coking and nuclear fuel processing industry in other provinces will have
a significant negative impact on the province’s industrial transfer. It can
be inferred that there is a phenomenon of intraregional transfer in the
petroleum processing, coking and nuclear fuel processing industry. This
industry is a resource industry. Tianjin and Hebei are rich in resources,
have certain comparative advantages in the development of this in­
dustry and can easily attract industrial clusters. With the enforcement of
environmental regulation and the optimization of industrial layout
policies, the industry is more likely to move within Beijing-Tianjin-
Hebei and the surrounding regions.
In addition, compared with the impact of environmental regulation
intensity on pollution-intensive industry transfer, the effects of eco­
nomic development level, infrastructure construction, and R&D invest­
ment are more significant. Although some enterprises are forced to
transfer under the pressure of environmental regulation, due to the high
cost of the transfer, if polluting enterprises can meet environmental
G. Zhang et al. Computers & Industrial Engineering 148 (2020) 106748

Table 7
Industrial regression estimation results based on the economic geospatial weight matrix.
(1) (2) (3)

Pooled OLS SDM Pooled OLS SDM Pooled OLS SDM

Contant − 0.773*** − 0.746*** − 0.673***

(0.0465) (0.0418) (0.0559)
FER 0.0029 2.56E-05 − 0.00991** − 0.0003
(0.0035) (0.0010) (0.0036) (0.0018)
FERlnPE 0.0020*** 2.83E-06 0.00310*** 0.0001
(0.0004) (0.0002) (0.0003) (0.0003)
IER − 0.0044** 0.0021*** − 0.0025** 0.0021*** − 0.00276*** 0.0020**
(0.0014) (0.0008) (0.0009) (0.0007) (0.0007) (0.0008)
lnGDP 0.0212*** − 0.0266* 0.0172*** − 0.0268* 0.0155*** − 0.0270*
(0.0023) (0.0153) (0.0037) (0.0150) (0.0039) (0.0152)
lnFDI − 0.0064 0.0002 − 0.0032 0.0003 − 0.0015 0.0002
(0.0048) (0.0015) (0.0037) (0.0015) (0.0030) (0.0015)
lnICS 0.0059* − 0.0018 − 0.0010 − 0.0018 − 0.0064 − 0.0022
(0.0025) (0.0117) (0.0026) (0.0117) (0.0035) (0.0117)
lnRD − 0.0054 − 0.0015 − 0.0017 − 0.0017 − 0.0014 − 0.0017
(0.0090) (0.0023) (0.0070) (0.0023) (0.0052) (0.0023)
lnIA 1.012*** 1.014*** 1.013*** 1.015*** 1.014*** 1.016***
(0.0067) (0.0161) (0.0043) (0.0158) (0.0026) (0.0161)
W*FER − 0.0009 0.0009
(0.0017) (0.0023)
W*FERlnPE − 0.0003 − 0.0004
(0.0003) (0.0004)
W*IER 0.0024** 0.00231** 0.0024**
(0.0011) (0.0010) (0.0011)
W*lnGDP − 0.0473* − 0.0478* − 0.0484*
(0.0273) (0.0274) (0.0276)
W*lnFDI − 0.0038* − 0.0032 − 0.0028
(0.0022) (0.0022) (0.0023)
W*lnICS 0.0061 0.0053 0.0062
(0.0182) (0.0181) (0.0183)
W*lnRD − 0.0046 − 0.005* − 0.0049
(0.0030) (0.0030) (0.0030)
W*lnIA 0.251** 0.254** 0.250**
(0.1010) (0.1000) (0.1020)
Spatial rho − 0.228** − 0.232** − 0.229**
(0.0995) (0.0986) (0.0997)
Hausman test 38.52*** 47.40*** 13.92*
LM-error 24.097*** 21.723*** 19.840***
Robust LM-error 20.253*** 18.750*** 17.364***
LM-lag 29.231*** 18.628*** 13.895***
Robust LM-lag 25.387*** 15.656*** 11.420***
LR test spatial effect 122.23*** 148.97*** 113.32***
Spatial fixed effect NO YES NO YES NO YES
Time period fixed effect NO YES NO YES NO YES
R2 0.999 0.983 0.999 0.982 0.999 0.982

Note: ***, ** and * represent p < 1%, p < 5% and p < 10%, respectively.

regulation requirements by other means, they will not adopt a transfer
strategy. The survival and development of enterprises take the pursuit of
maximizing economic benefits as the primary goal. Factors such as
regional economic development level and infrastructure construction
reflect the strength and development potential of the region, and have a
strong appeal for the site selection and scale expansion of enterprises,
which is conducive to the creation of good economic benefits. Therefore,
economic development level, infrastructure construction and R&D in­
vestment have a stronger effect on industrial transfer than environ­
mental regulation.
6. Robustness tests
To verify the robustness of the regression results, this paper replaces
the inverse distance geospatial weight matrix with the economic geo­
spatial weight matrix and the geographically adjacent spatial weight
matrix and re-estimates the model. The regression results using the
economic geospatial weight matrix are shown in Tables 7 and 8.
The regression results in Tables 7 and 8 show that from the
perspective of the overall industry, formal environmental regulation will
not have a significant impact on industrial transfer, and local
government environmental regulation enforcement has no obvious in­
termediate effects; therefore, ERP and local government environmental
regulation enforcement activities will not cause industrial transfer in
Beijing-Tianjin-Hebei and the surrounding regions. In summary, there is
no pollution haven effect in Beijing-Tianjin-Hebei and the surrounding
regions. From the regression results of the five pollution-intensive in­
dustries, after the promulgation of ERP, regardless of whether the local
government’s environmental regulation enforcement has an interme­
diary role, there will be no significant impact on the province’s paper­
making and paper products industry, chemical raw materials and
chemical products manufacturing industry and nonmetallic mineral
products industry. When the local government’s environmental regu­
lation enforcement has a partial intermediary role, it will have a sig­
nificant positive impact on the province’s ferrous metal smelting and
rolling processing industry and the transfer of the petroleum processing,
coking and nuclear fuel processing industry. Combined with the impacts
of local government environmental regulation enforcement and indus­
trial transfer in other provinces, formal environmental regulation will
lead to the transfer of the ferrous metal smelting and rolling processing
industry out of the region, but the local government’s environmental
regulation enforcement will weaken this role. The local government

13
 G. Zhang et al.
Table 8
Regression results of pollution-intensive industries based on the economic geospatial weight matrix.
lnpa lncp lnfs lnni lncn

(1) (2) (3) (1) (2) (3) (1) (2) (3) (1) (2) (3) (1) (2) (3)

FER − 0.0002 − 0.001 0.0715* 0.093 0.011 − 0.159** 0.0003 0.033 0.094** − 0.026
(0.031) (0.057) (0.037) (0.070) (0.043) (0.077) (0.025) (0.046) (0.039) (0.070)
FERlnPE 0.002 0.001 0.010 − 0.005 0.0125 0.038*** − 0.001 − 0.007 0.024*** 0.028**
(0.006) (0.011) (0.007) (0.013) (0.00782) (0.014) (0.005) (0.009) (0.007) (0.013)
IER 0.008 − 0.004 0.013 − 0.028 − 0.027 − 0.028 0.0599* 0.0571* 0.0660* 0.032 0.031 0.0338* − 0.054* − 0.049 − 0.044
(0.027) (0.026) (0.027) (0.031) (0.030) (0.031) (0.036) (0.0336) (0.035) (0.020) (0.020) (0.020) (0.032) (0.030) (0.031)
lnGDP 1.151** 1.197** 1.160** 3.032*** 2.934*** 3.035*** 4.586*** 4.792*** 4.597*** 1.956*** 1.927*** 1.949*** 1.170* 1.209** 1.167**
(0.504) (0.507) (0.497) (0.608) (0.609) (0.608) (0.726) (0.706) (0.697) (0.403) (0.400) (0.400) (0.628) (0.598) (0.594)
lnFDI 0.202*** 0.196*** 0.201*** − 0.087 − 0.103* − 0.084 0.172** 0.177*** 0.146** 0.014 0.010 0.018 − 0.129** − 0.145** − 0.149**
(0.049) (0.049) (0.048) (0.058) (0.058) (0.059) (0.068) (0.0659) (0.066) (0.039) (0.038) (0.039) (0.061) (0.058) (0.059)
lnICS − 0.387 − 0.431 − 0.383 − 1.596*** − 1.637*** − 1.574*** 0.176 0.104 0.020 1.355*** 1.354*** 1.382*** − 3.612*** − 3.759*** − 3.777***
(0.380) (0.387) (0.378) (0.457) (0.465) (0.460) (0.529) (0.521) (0.511) (0.306) (0.306) (0.305) (0.488) (0.473) (0.468)
lnRD − 0.245*** − 0.238*** − 0.236*** − 0.086 − 0.084 − 0.089 − 0.220** − 0.196* − 0.188* − 0.076 − 0.075 − 0.076 − 0.0001 0.037 0.0391
(0.075) (0.077) (0.075) (0.090) (0.092) (0.091) (0.104) (0.103) (0.101) (0.060) (0.060) (0.060) (0.094) (0.091) (0.090)
lnIA − 0.815 − 0.714 − 0.876* 1.735*** 1.869*** 1.717*** − 1.150 − 1.297* − 1.118 0.238 0.287 0.199 3.572*** 3.584*** 3.600***
(0.529) (0.532) (0.523) (0.630) (0.632) (0.632) (0.736) (0.711) (0.707) (0.420) (0.415) (0.417) (0.687) (0.651) (0.654)
W*FER − 0.083 − 0.167** − 0.013 − 0.017 0.051 − 0.051 − 0.014 − 0.043 0.164** − 0.0429
(0.054) (0.076) (0.066) (0.092) (0.076) (0.102) (0.043) (0.060) (0.069) (0.091)
14

W*FERlnPE 0.001 0.019 0.001 0.001 0.0165 0.026 0.002 0.006 0.046*** 0.051***
(0.009) (0.012) (0.011) (0.015) (0.0122) (0.017) (0.007) (0.010) (0.011) (0.015)
W*IER − 0.0762** − 0.0659* − 0.0759** − 0.046 − 0.032 − 0.048 0.027 0.0156 0.037 0.013 0.019 0.011 0.00618 0.0104 0.011
(0.035) (0.034) (0.034) (0.042) (0.041) (0.042) (0.049) (0.0466) (0.047) (0.027) (0.027) (0.027) (0.043) (0.041) (0.041)
W*lnGDP 2.007** 1.976** 2.081** 2.647** 2.654** 2.597** 5.347*** 5.791*** 5.937*** 1.123 1.041 1.019 − 2.865** − 2.301** − 2.228**
(0.905) (0.934) (0.913) (1.148) (1.179) (1.164) (1.280) (1.268) (1.248) (0.751) (0.765) (0.764) (1.119) (1.096) (1.083)
W*lnFDI 0.148** 0.167** 0.104 − 0.106 − 0.109 − 0.109 0.235** 0.213** 0.182* 0.085 0.083 0.069 0.149 0.0452 0.0241
(0.071) (0.072) (0.076) (0.086) (0.087) (0.092) (0.100) (0.0985) (0.103) (0.056) (0.056) (0.060) (0.091) (0.089) (0.094)
W*lnICS − 1.583*** − 1.428** − 1.622*** − 1.947*** − 1.930*** − 1.910*** − 3.863*** − 4.087*** − 4.234*** 1.995*** 2.079*** 2.056*** − 2.295*** − 2.597*** − 2.675***
(0.601) (0.607) (0.599) (0.710) (0.722) (0.719) (0.920) (0.911) (0.898) (0.476) (0.478) (0.480) (0.754) (0.733) (0.729)
W*lnRD − 0.435*** − 0.394*** − 0.424*** − 0.159 − 0.163 − 0.157 0.081 0.107 0.085 − 0.108 − 0.097 − 0.102 0.0513 0.101 0.0965
(0.099) (0.099) (0.098) (0.118) (0.118) (0.118) (0.138) (0.134) (0.132) (0.079) (0.078) (0.078) (0.128) (0.122) (0.122)
W*lnIA − 1.183* − 1.234* − 1.108 − 0.290 − 0.427 − 0.218 − 1.266 − 1.398 − 1.698* − 0.387 − 0.364 − 0.273 4.525*** 4.517*** 4.533***

Computers & Industrial Engineering 148 (2020) 106748

(0.682) (0.698) (0.691) (0.814) (0.830) (0.831) (0.940) (0.929) (0.920) (0.542) (0.544) (0.546) (0.904) (0.875) (0.864)
Spatial rho − 0.559*** − 0.566*** − 0.551*** 0.110 0.108 0.107 − 0.073 − 0.0735 − 0.066 − 0.426*** − 0.423*** − 0.413*** − 0.310*** − 0.360*** − 0.374***
(0.084) (0.084) (0.085) (0.109) (0.109) (0.109) (0.121) (0.120) (0.120) (0.088) (0.088) (0.089) (0.099) (0.097) (0.097)
Spatial fixed YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES
effect
Time period YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES
fixed effect
R2 0.002 0.001 0.002 0.054 0.049 0.055 0.167 0.166 0.157 0.028 0.032 0.033 0.009 0.012 0.011

Note: ***, ** and * represent p < 1%, p < 5% and p < 10%, respectively.
G. Zhang et al. Computers & Industrial Engineering 148 (2020) 106748

Table 9
Industrial regression estimation results based on the geographically adjacent spatial weight matrix.
(1) (2) (3)

Pooled OLS SDM Pooled OLS SDM Pooled OLS SDM

Contant − 0.773*** − 0.746*** − 0.673***

(0.0465) (0.0418) (0.0559)
FER 0.0029 0.00007 − 0.00991** − 0.0020
(0.0035) (0.001) (0.0036) (0.002)
FERlnPE 0.0020*** 0.00010 0.00310*** 0.00045
(0.0004) (0.000) (0.0003) (0.000)
IER − 0.0044** 0.0006 − 0.0025** 0.0005 − 0.00276*** 0.0004
(0.0014) (0.001) (0.0009) (0.001) (0.0007) (0.001)
lnGDP 0.0212*** 0.0134 0.0172*** 0.0163 0.0155*** 0.0176
(0.0023) (0.019) (0.0037) (0.019) (0.0039) (0.019)
lnFDI − 0.0064 0.0009 − 0.0032 0.0008 − 0.0015 0.0004
(0.0048) (0.002) (0.0037) (0.002) (0.0030) (0.002)
lnICS 0.0059* 0.0004 − 0.0010 0.0021 − 0.0064 0.0004
(0.0025) (0.017) (0.0026) (0.016) (0.0035) (0.017)
lnRD − 0.0054 0.0000 − 0.0017 0.0002 − 0.0014 0.0003
(0.0090) (0.003) (0.0070) (0.003) (0.0052) (0.003)
lnIA 1.012*** 0.973*** 1.013*** 0.973*** 1.014*** 0.972***
(0.0067) (0.019) (0.0043) (0.019) (0.0026) (0.020)
W*FER − 0.0007 0.0004
(0.003) (0.004)
W*FERlnPE − 0.0003 − 0.0003
(0.001) (0.001)
W*IER 0.0010 0.0008 0.0012
(0.002) (0.002) (0.002)
W*lnGDP 0.0633 0.0574 0.0688
(0.045) (0.045) (0.046)
W*lnFDI − 0.00875** − 0.00775* − 0.00832*
(0.004) (0.004) (0.005)
W*lnICS − 0.0292 − 0.0227 − 0.0259
(0.052) (0.051) (0.052)
W*lnRD − 0.0017 − 0.0016 − 0.0022
(0.007) (0.006) (0.007)
W*lnIA 0.0257 0.0195 − 0.0060
(0.154) (0.156) (0.164)
Spatial rho − 0.0501 − 0.0460 − 0.0332
(0.150) (0.150) (0.157)
LM-error 36.951*** 36.831*** 27.915***
Robust LM-error 33.388*** 34.535*** 26.545***
LM-lag 15.775*** 6.943*** 3.317*
Robust LM-lag 12.212*** 4.647** 1.947
LR test spatial effect 122.23*** 148.97*** 113.32***
Spatial fixed effect NO YES NO YES NO YES
Time period fixed effect NO YES NO YES NO YES
R2 0.999 0.995 0.999 0.995 0.999 0.993

Note: ***, ** and * represent p < 1%, p < 5% and p < 10%, respectively.

enforcement of environmental regulations will increase the number of
enterprises in the petroleum processing, coking and nuclear fuel pro­
cessing industry, and there is a phenomenon of internal transfer in the
region.
Comparing Tables 5 and 7, the regression results of the overall in­
dustry in Beijing-Tianjin-Hebei and the surrounding regions are basi­
cally the same under the two spatial weight matrices. There are subtle
differences. Under the economic geospatial weight matrix, the regres­
sion coefficients of IER in the three models are significantly enhanced.
The regression coefficients of W*FER and W*FERlnPE in model (3) are
no longer significant, and the regression coefficient of W*IER is signif­
icant. Industrial transfer in other provinces has a significant negative
impact on industrial transfer in the province. Comparing Tables 6 and 8,
it can be seen that the main effect regression results of the papermaking
and paper products industry are basically the same, but the regression
coefficients of W*IER in the three models are significant, and the
regression coefficient of W*FER in model (3) appears significant. In the
regression results of the nonmetallic mineral products industry, the
regression coefficients of IER in model (1) and model (2) are no longer
significant, and the significance of the regression coefficient of IER in
model (3) is weakened. The regression coefficient of IER in the petro­
leum processing, coking and nuclear fuel processing industry is no
longer significant, and the regression coefficient of W*FER in model (1)
is significant. The regression results of the chemical raw materials and
chemical manufacturing industry and the ferrous metal smelting and
rolling processing industry are basically the same under the two spatial
weight matrices. Although the regression results of the overall industry
and the pollution-intensive industries have small differences in some
control variables under the two spatial weight matrices, the effects of the
independent variables are basically consistent, and the regression results
of the model can be considered robust. Provinces with higher levels of
economic development will have stronger influence and radiation ef­
fects on provinces with lower levels of economic development. Prov­
inces with similar economic levels can better absorb and utilize
economic resources and have the economic advantage of attracting in­
dustrial transfer. The economic geospatial weight matrix is based on the
inverse distance geospatial weight matrix. The economic level of
Beijing-Tianjin-Hebei and the surrounding regions is taken as an
important factor to measure spatial effects (Parent & LeSage, 2008), but
the integration of economic factors will make some variables that are
greatly affected by the economy appear more sensitive to changes,
resulting in different regression results.
To further verify the results, this paper uses the geographically
adjacent spatial weight matrix to re-estimate the model. The regression

15
 G. Zhang et al.
Table 10
Regression results of pollution-intensive industries based on the geographically adjacent spatial weight matrix.
lnpa lncp lnfs lnni lncn

(1) (2) (3) (1) (2) R (1) (2) (3) (1) (2) (3) (1) (2) (3)

FER − 0.0075 − 0.010 0.039 0.059 − 0.009 − 0.137* − 0.015 − 0.016 0.0779** − 0.041
(0.038) (0.070) (0.038) (0.076) (0.041) (0.078) (0.026) (0.052) (0.038) (0.070)
FERlnPE − 0.00006 0.004 0.005 − 0.004 0.006 0.0270* − 0.002 0.00033 0.0192*** 0.0253**
(0.007) (0.014) (0.007) (0.014) (0.007) (0.014) (0.005) (0.009) (0.006) (0.013)
IER 0.005 0.002 0.0402* − 0.0587** − 0.0575** − 0.0598** 0.035 0.035 0.044 0.0406** 0.0353* 0.0433** − 0.0619** − 0.0595** − 0.0498*
(0.028) (0.028) (0.022) (0.028) (0.028) (0.028) (0.031) (0.029) (0.029) (0.020) (0.021) (0.019) (0.028) (0.026) (0.026)
lnGDP 1.818*** 1.704*** 0.938** 4.595*** 4.603*** 4.565*** 6.521*** 6.559*** 6.728*** 2.220*** 2.052*** 2.256*** 1.166* 1.142* 1.358**
(0.668) (0.652) (0.393) (0.661) (0.657) (0.667) (0.712) (0.689) (0.680) (0.466) (0.502) (0.466) (0.674) (0.625) (0.635)
lnFDI 0.076 0.083 0.028 − 0.045 − 0.055 − 0.040 0.209*** 0.214*** 0.175*** 0.016 0.023 0.016 − 0.081 − 0.0973* − 0.111*
(0.061) (0.060) (0.054) (0.061) (0.060) (0.063) (0.067) (0.064) (0.065) (0.042) (0.045) (0.043) (0.060) (0.056) (0.058)
lnICS 0.118 − 0.059 0.160 − 1.053* − 1.068* − 1.036* 1.454** 1.333** 1.318** 2.128*** 1.995*** 2.106*** − 3.511*** − 3.771*** − 3.680***
(0.574) (0.565) (0.255) (0.574) (0.573) (0.576) (0.616) (0.600) (0.585) (0.396) (0.429) (0.393) (0.563) (0.527) (0.527)
lnRD − 0.240** − 0.238** − 0.065 − 0.276*** − 0.277*** − 0.276*** − 0.210** − 0.201* − 0.213** − 0.064 − 0.056 − 0.070 0.040 0.045 0.032
(0.099) (0.098) (0.087) (0.097) (0.098) (0.097) (0.107) (0.104) (0.101) (0.067) (0.073) (0.067) (0.096) (0.090) (0.090)
lnIA − 1.033 − 0.985 − 0.110 − 0.212 − 0.218 − 0.180 − 3.310*** − 3.369*** − 3.591*** 0.042 0.226 − 0.061 2.848*** 2.818*** 2.511***
(0.675) (0.653) (0.368) (0.667) (0.658) (0.681) (0.720) (0.690) (0.694) (0.473) (0.505) (0.478) (0.701) (0.645) (0.672)
W*FER − 0.019 − 0.342*** 0.015 0.041 0.037 − 0.195 − 0.119* − 0.202** 0.103 − 0.224
(0.101) (0.111) (0.102) (0.152) (0.109) (0.155) (0.069) (0.103) (0.100) (0.141)
16

W*FERlnPE 0.022 0.0751*** 0.002 − 0.007 0.028 0.0613** − 0.007 0.021 0.0536*** 0.0857***
(0.019) (0.024) (0.019) (0.029) (0.020) (0.030) (0.014) (0.020) (0.018) (0.027)
W*IER − 0.080 − 0.069 − 0.0590** − 0.071 − 0.061 − 0.076 0.011 0.016 0.048 0.024 0.027 0.029 − 0.143** − 0.111** − 0.102*
(0.061) (0.060) (0.027) (0.061) (0.060) (0.063) (0.067) (0.065) (0.066) (0.042) (0.045) (0.043) (0.060) (0.056) (0.058)
W*lnGDP 0.929 1.482 − 0.596 3.785** 3.898** 3.669** 7.503*** 7.962*** 8.364*** 0.750 0.901 0.974 − 0.083 0.909 0.988
(1.551) (1.554) (0.488) (1.625) (1.652) (1.674) (1.731) (1.722) (1.693) (1.171) (1.279) (1.195) (1.522) (1.452) (1.460)
W*lnFDI 0.149 0.098 − 0.011 0.106 0.094 0.120 0.605*** 0.565*** 0.488*** 0.083 0.085 0.046 0.065 − 0.050 − 0.097
(0.149) (0.152) (0.130) (0.149) (0.154) (0.158) (0.159) (0.160) (0.160) (0.101) (0.113) (0.107) (0.146) (0.141) (0.144)
W*lnICS − 0.562 − 1.198 − 1.175*** − 0.356 − 0.388 − 0.301 − 0.979 − 1.344 − 1.452 6.907*** 6.521*** 6.778*** − 7.105*** − 7.979*** − 7.723***
(1.799) (1.780) (0.320) (1.784) (1.786) (1.794) (1.969) (1.920) (1.873) (1.234) (1.342) (1.228) (1.766) (1.658) (1.654)
W*lnRD − 0.686*** − 0.664*** − 0.219 − 0.465** − 0.478** − 0.461** 0.498** 0.519** 0.468** − 0.358** − 0.333** − 0.362** 0.135 0.146 0.106
(0.229) (0.225) (0.161) (0.227) (0.227) (0.228) (0.244) (0.238) (0.232) (0.155) (0.168) (0.153) (0.224) (0.209) (0.209)
W*lnIA − 1.406 − 1.320 0.966 − 3.143** − 3.294** − 3.060** − 4.168*** − 4.137*** − 4.719*** − 2.844*** − 2.722*** − 2.865*** 6.073*** 5.948*** 5.644***

Computers & Industrial Engineering 148 (2020) 106748

(1.306) (1.281) (0.627) (1.292) (1.285) (1.319) (1.402) (1.363) (1.354) (0.895) (0.968) (0.902) (1.371) (1.279) (1.301)
Spatial rho − 0.568*** − 0.562*** − 0.182 0.135 0.137 0.136 − 0.400*** − 0.420*** − 0.393*** − 0.612*** − 0.590*** − 0.618*** − 0.523*** − 0.573*** − 0.559***
(0.142) (0.142) (0.135) (0.143) (0.143) (0.143) (0.147) (0.145) (0.145) (0.143) (0.150) (0.143) (0.157) (0.151) (0.152)
Hausman test 64.74*** 44.33*** 12.670 23.85*** 24.28*** 26.01*** 61.35*** 346.61*** 81.01*** 56.35*** 62.67*** 59.85*** 72.33*** 698.84*** 59.61***
Spatial fixed YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES
effect
Time period YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES
fixed effect
R2 0.005 0.012 0.024 0.046 0.045 0.045 0.106 0.105 0.100 0.162 0.164 0.152 0.008 0.001 0.002

Note: ***, ** and * represent p < 1%, p < 5% and p < 10%, respectively.
G. Zhang et al.
results are shown in Table 9 and Table 10.
The regression results in Table 9 verify that formal environmental
regulation and local government environmental regulation enforcement
do not have significant impacts on the overall industrial transfer. From
the perspective of the overall industry, there is no pollution haven effect
in Beijing-Tianjin-Hebei and the surrounding regions. Compared with
Table 5, there is almost no difference in the regression results under the
two spatial weight matrices. Although the regression coefficients of W*
FER and W*FERlnPE in model (3) are not statistically significant, the
regression results are consistent with those under the economic geo­
spatial weight matrix, indicating that for the overall industry, the in­
dustrial transfer in this province will not be affected by the formal
environmental regulation intensity of other provinces and the enforce­
ment of the local government’s environmental regulations. Table 10
shows that the main effect regression results of the five pollution-
intensive industries under the geographically adjacent spatial weight
matrix are basically consistent with those under the other two spatial
weight matrices, and the regression results under the geographically
adjacent spatial weight matrix are more consistent with those under the
inverse distance geospatial weight matrix. The regression results of the
economic geospatial weight matrix and the geographically adjacent
spatial weight matrix well verify the robustness of the empirical results.
7. Conclusions
ERP are the basis of China’s environmental regulation, with
pollution-intensive industries to be the key regulatory targets. The
implementation of ERP by local governments will affect the roles of ERP
in the transfer of pollution-intensive industries. Based on the panel data
of Beijing-Tianjin-Hebei and the surrounding regions from 2004 to
2016, this paper investigates the impact of formal environmental
regulation on the transfer of pollution-intensive industries and further
explores the intermediary effect of the local government’s environ­
mental regulation enforcement between formal environmental regula­
tion and pollution-intensive industry transfer. We obtain some
interesting findings as below:
First, from the perspective of the overall industry, ERP have neither
caused obvious industrial transfer in Beijing-Tianjin-Hebei and the
surrounding regions, nor played a significant role in attracting industrial
transfer from outside the region. This situation will not change with the
intervention of the local government’s environmental regulation
enforcement, the intermediary role of which between ERP and industrial
transfer is not significant as well. The overall industrial transfer of
Beijing-Tianjin-Hebei and the surrounding regions will be affected by
the degree of industrial agglomeration in different provinces to a greater
extent.
Second, ERP have different effects on the transfer of different
pollution-intensive industries. Although ERP have not caused a large
transfer to the overall industry, they have a significant impact on the
transfer of individual pollution-intensive industries. Specifically, the
policies of Beijing-Tianjin-Hebei and the surrounding regions have not
taken a significant impact on the transfer of the papermaking and paper
products industry, chemical raw materials and chemical products
manufacturing industry or nonmetallic mineral products industry, but
under the interaction of different degrees of local government envi­
ronmental regulation enforcement, there will be industrial transfer for
the ferrous metal smelting and rolling processing industry and the pe­
troleum processing, coking and nuclear fuel processing industry. The
enforcement of local government environmental regulation will often
weaken the effectiveness of ERP on the transfer of pollution-intensive
industries. Policy implementation of local government is often not in
place, and pollution control work is progressing slowly. It is therefore
necessary to strengthen the local government’s governance supervision
and environmental performance assessment.
Third, the transfer of pollution-intensive industries in Beijing-
Tianjin-Hebei and the surrounding regions is more affected by factors
17
Computers & Industrial Engineering 148 (2020) 106748
such as economic development level, infrastructure construction, and
R&D investment. China’s pollution-intensive industries usually have
strong development bases and regional advantages, and most of them
are capital- and resource-intensive industries, which implies the diffi­
culty to industrial transfer. In addition, if pollution were not be pre­
vented from the source, industrial transfer would only lead pollution
spread to a greater extent. Therefore, the level of economic develop­
ment, R&D investment, and infrastructure construction have become
important factors affecting industrial transfer, which tells the story that
pollution-intensive industries strive to improve the economy and the
environment under better external conditions.
Due to the difficulty in collecting data related to pollution-intensive
industries, this paper selects only five representative industries and the
entire industry for research. The scope of the research is not broad
enough, and the impacts of the ERP and the local government’s envi­
ronmental regulation enforcement are not explored deeply as we have
expected, which paves a way for our future investigation.
CRediT authorship contribution statement
Guoxing Zhang: Methodology, Visualization, Writing - original
draft. Wei Liu: Software, Data curation, Writing - original draft. Hon­
gbo Duan: Conceptualization, Investigation, Supervision, Validation,
Writing - review & editing.
Acknowledgements
We appreciate the comments from all the anonymous referees. This
research is financially supported by National Natural Science Founda­
tion of China (71433005, 71874074, 71874177, 71950008), Humanity
and Social Science Plan Foundation of Ministry of Education of China
(18YJC630208, 19YJC810007).
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