The Threshold Effect of Environmental Regulation, FDI Agglomeration, and Water Utilization Efficiency under “Double Control Actions”—An Empirical Test Based on Yangtze River Economic Belt

Abstract

In this study, the SE-SBM model considering undesirable outputs was used to measure the water utilization efficiency of the Yangtze River Economic Belt from 2006 to 2016, and the panel threshold model was used to estimate the impact of environmental regulation and foreign direct investment (FDI) agglomeration on water utilization efficiency. The results show that the water utilization efficiency presents a “U”-shaped trend as a whole, declines incrementally along the eastern, central, and western regions of the economic belt, and that the water utilization efficiency of the economic belt first converges and then diverges. In the estimation of the double threshold panel model, when the per capita GDP is lower than 2.635 or greater than 12.058 thousand dollars, the environmental regulation shows a significant positive effect. Otherwise, the environmental regulation barely shows a significant negative effect. FDI has not had a great impact on water resources utilization efficiency, and neither the “pollution aura” nor “pollution shelter” are significant. When the per capita GDP is lower than 2.184 or greater than 12.058 thousand dollars, FDI can significantly improve the water utilization efficiency through environmental regulation. Besides, the positive effects of technological innovation and foreign trade dependence are significant, and so are the negative effects of industrialization. Differentiated environmental regulation policies should be formulated; industrial upgrade should be promoted; innovation of water-saving and emission reduction should be strengthened in the Yangtze River Economic Belt.

Keywords

• water utilization efficiency
• environmental regulation
• FDI agglomeration
• threshold effect
• Yangtze River Economic Belt