Capital Matching, Environmental Regulation and Carbon Emission Performance

Authors

  • Shan Yan

    School of Economics and Management, Jiangxi University of Science and Technology, Ganzhou, 341000, China
  • Wen Zhong

    School of Economics and Management, Jiangxi University of Science and Technology, Ganzhou, 341000, China
  • Zhiqing Yan

    School of Economics and Management, Jiangxi University of Science and Technology, Ganzhou, 341000, China

DOI:

https://doi.org/10.30564/jees.v7i1.7206
Received: 4 September 2024 | Revised: 13 September 2024 | Accepted: 23 September 2024 | Published Online: 29 October 2024

Abstract

Under the “dual carbon” goal, local governments in China have strategically focused on enhancing capital utilization efficiency and enforcing environmental regulations to improve carbon emission performance. This dual approach targets the intertwined challenges of economic development and environmental protection. Utilizing data from 266 prefecture-level cities in China from 2007 to 2019, this study systematically investigates the effects of capital matching and environmental regulation on carbon emission performance through the spatial Durbin model and the instrumental variable method. The results indicate that both capital matching and environmental regulation significantly enhance carbon emission performance. Capital matching demonstrates positive spatial spillover effects; whereas environmental regulation exhibits negative spatial spillover effects. Furthermore, there are synergistic effects between capital matching and environmental regulation that jointly enhance carbon emission performance. To address potential biases caused by endogenous environmental regulation, the study uses the proportion of environment-related words in provincial government work reports as an instrumental variable for environmental regulation. Additionally, to capture the heterogeneity in the environmental governance willingness and intensity of prefecture-level municipal governments, the study constructs heterogeneous instrumental variables. These variables are derived by multiplying the proportion of a prefecture-level city’s total industrial output value to the province’s total industrial output value with the proportion of environment-related words in the provincial government work reports. Analyses based on these instrumental variables reveal that endogenous issues in environmental regulation lead to an overestimation of its positive impact on carbon emission performance.

Keywords:

Capital Matching; Environmental Regulation; High-Quality Urban Development; Spatial Panel Model; Panel Sill Model

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How to Cite

Shan Yan, Wen Zhong, & Zhiqing Yan. (2025). Capital Matching, Environmental Regulation and Carbon Emission Performance. Journal of Environmental & Earth Sciences, 7(1), 29–46. https://doi.org/10.30564/jees.v7i1.7206

Issue

Vol. 7 , Iss. 1 (January 2025): In Progress

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Article

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Copyright © 2024 Shan Yan, Wen Zhong, Zhiqing Yan

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This is an open access article under the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) License.

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