Impacts of heterogeneous environmental regulation on green transformation of China's iron and steel industry: Evidence from dynamic panel threshold regression

Comprehensively observing the influencing mechanisms of heterogeneous environmental regulations on industrial green transformation will provide important implications for environmental policy-making. This study first proposes a global super adjusted epsilon-based measure with undesirable outputs to evaluate industrial green transformation performance (GTP). A dynamic panel threshold model with interaction term is then constructed to estimate the non-linear and interactive effects of heterogeneous regulations on GTP. Empirical tests based on 49 large- and medium-sized iron and steel (IS) firms during 2010–2017 demonstrate that: 1) The GTP of the IS industry experienced fluctuating enhancement during the observation period, and a cumulative cyclic effect is found for the GTP; 2) both formal and informal regulations improve industrial GTP, and formal regulation shows two thresholds while informal regulation has one threshold; 3) the interactive effect between formal and informal regulations has formed and exerted positive effects on GTP. Based on the empirical results, corresponding suggestions are posited to further facilitate the IS industry's green transformation and environmental governance.