The Effect Of Environmental Regulation On Air Pollution,Productivity And Factor Structure

China has made great achievements in the process of reform and opening up for more than 40 years,but it also has brought about increasingly serious environmental problems.Multi-method environmental regulation is an important method to solve the problems of environmental pollution and economic development.It has received wide attention and recognition from governments at all levels and the academic community.However,the effectiveness of environmental regulations and the degree of impact on different indicators and regions still lack sufficient research.This paper makes a first empirical attempt at estimating the effects of environmental regulation on air pollution,environmental performance,total factor productivity?TFP?and factor structure based on a quasi-natural experiment method using a novel dataset of216 prefectural-level cities during the years 1998-2016 in China.Specifically,we are focused on the policy impact of the listed key environmental protection?KEP?prefectures which subject to more stringent environmental regulations than non-KEP prefectures.The Porter hypothesis does not exist in China.Our empirical results show that the PM_2.5intensity,environmental performance,and TFP of the KEP prefectures are significantly lower than the non-KEP prefectures.The environmental policy also affects the factor structure of KEP cites.Heterogeneity analysis indicates that the policy significantly lowered the PM_2.5for central and western cities while it is unclear for eastern cities.Our findings also document that the policy effects are unclear in the long-term.Various robustness checks confirm the internal validity.