Environmental regulatory competition and haze pollution: beggar thy neighbor or benefit thy neighbor?

Effective implementation of environmental regulation is of great significance for China to comprehensively win the battle against pollution. Accordingly, based on the panel data of 284 prefecture-level cities in China from 2017 to 2019, this paper constructs a two-regime spatial Durbin model to test the form of environmental regulatory competition between local governments. Furthermore, a spatial lag of the X (SLX) model is constructed to discuss the influence of environmental regulatory competition on haze pollution from the perspective of local and neighborhood effects. The findings indicate that there are asymmetric environmental regulatory competition forms of race to the up and race to the bottom at the same time in implementing environmental regulation. And the local environmental regulatory competition overall tends to be a race to the up, which makes adjacent cities form a haze governance model of neighbors as partners. Moreover, the results are robust after a series of robustness tests. Simultaneously, environmental regulatory competition significantly reduces haze concentrations in northern areas. Notably, the guidance of the central government’s policy effectively exerts the haze control effect of environmental regulatory competition. These findings provide empirical evidence and policy implications for strengthening targeted supervision and adaptive incentives for the implementation of local environmental regulations.