Which works better? Comparing the multiple effects of heterogeneous environmental regulations on urban green economic transformation in China

The coordination of heterogeneous environmental regulations (HER) is crucial for promoting regional green synergistic development. The primary objective of this study is to evaluate the impact of various heterogeneous environmental regulations (HER) on the green economic transformation (GET) of cities in China. We developed a comprehensive index system to measure the GET across three dimensions: the level of economic green development, the capacity for resource and environmental support, and the level of support for green transformation. This study examines 284 Chinese cities during the period from 2011 to 2020. Applying a dynamic panel model, a dynamic Durbin model, and a synergy model, we explore direct effects, spatial effects, and asymmetry of synergistic effects of HER on the GET of Chinese cities. We find that, in terms of direct effects, all environmental regulations can promote urban GET, though the magnitude of effects is heterogeneous. In terms of spatial spillover effects, market-incentive and public-participation environmental policies in a given region inhibit green transformation in neighboring regions, while overall environmental regulation and command-and-control regulation have significant positive effects on neighboring regions’ green transformation. Furthermore, the total short-term effect of HER is significantly higher than the total long-term effect. The synergistic effect of HER is positive for the Beijing-Tianjin-Hebei city cluster and the Yangtze River Delta city cluster. This study can provide valuable policy implications for regional coordinated development with a low-carbon focus.