The effect of strategic synergy between local and neighborhood environmental regulations on green innovation efficiency: The perspective of industrial transfer

Considering the environmental governance dilemma caused by environmental decentralization, this study aims to explore whether the strategic synergy between local and neighborhood environmental regulations can be an essential tool to improve green innovation efficiency and achieve sustainable development. Using the data of industrial firms from 2005 to 2019, and employing network slack-based measure and Tobit regression, this study provides empirical evidence that (1) the green innovation efficiency shows an upward trend in fluctuations but still has great room for improvement; (2) the direct impact of local environmental regulation on green innovation is positive, but the indirect impact through forcing firms to transfer into the neighborhood with loose regulation is negative, that is, the industrial transfer plays a suppression effect; (3) the strategic synergy of environmental regulations has U-shaped and direct effect on green innovation and also has a positive indirect effect through inhibiting the firm's behavior transferring into the neighborhood. This study reveals the influence mechanism of the strategic synergy of local-neighborhood environmental regulations and offers empirical evidence to explain the reason why synergistic environmental governance can effectively promote green innovation, which provides the theoretical guidance for government to formulate environmental policies and construct an environmental governance system.