Spillover effects of environmental regulation along industrial chains: evidence from a quasi-natural experiment

Utilizing difference-in-differences regression , we assess the influence of the Clean Production Standards (CPS) on upstream industries through the analysis of Chinese industrial enterprises spanning the years 2000 to 2013. The findings reveal a substantial reduction in pollution emission levels within upstream sectors following the implementation of the CPS. A closer examination of the mechanisms underlying this impact indicates that it is primarily driven by demand and learning factors. Heterogeneity tests further illustrate that the spillover impacts of the CPS on upstream firms are more pronounced in regions characterized by advanced marketization, stringent environmental law enforcement, and favorable downstream industry outlook. Additionally, the presence of stronger, more stable industrial chain relationships amplifies the spillover effect. Beyond its direct impact on pollution reduction, the study also observes that the CPS enhances upstream green total factor productivity, thereby facilitating a shift towards high-quality growth.