How does industrial transfer affect environmental quality? Evidence from China

Rapid industrialization has made China one of the largest pollutant emitters worldwide. The transfer of heavily-polluted industries has become urgent because of environmental problems. Some manufacturing industries, incredibly energy-intensive and pollution-intensive, have been transferred to less-developed areas for lower labor and land costs. In turn, the industrial transfer would also deteriorate the ecological quality of those areas. Along these lines, it is pivotal to examine the two-way interactions from industrial transfer and environmental quality. This paper collected panel data of 30 Chinese provinces from 2000 to 2015, using the GS3SLS method to find the interactive relationship for industrial transfer and environmental quality. The findings show that industrial transfer and environmental quality both have interactive as well as spatial spillover effects on each other significantly. Study results suggest that the industrial transfer of different provinces needs to consider the coordinated development of the whole area. It is recommended to formulate an inter-regional industrial transfer strategy to protect the environment.