Study on the influencing factors and profitability of horizontal ecological compensation mechanism in Yellow River Basin of China

Horizontal ecological compensation mechanism provides solutions for cross-domain protection of ecological environment, and the key to its implementation depends on the establishment of a suitable incentive mechanism of economic benefits to influence the conservation behavior of each interest body. This article constructs a horizontal ecological compensation mechanism for the Yellow River Basin through indicator variables to analyze the profitability of the participating subjects. Based on data from 83 cities in the Yellow River Basin in 2019, an empirical study was conducted using a binary unordered logit regression model to examine the regional benefits generated by the horizontal ecological compensation mechanism in the Yellow River Basin. The level of urban economic development and ecological environment management significantly affects the profitability of horizontal ecological compensation mechanisms in the Yellow River basin. The heterogeneity analysis finds that the profitability of the horizontal ecological compensation mechanism in the Yellow River basin is stronger in the upstream central and western regions, which are more likely to produce better ecological compensation benefits as recipients of compensation funds. Governments in the Yellow River Basin should strengthen cross-regional cooperation, continuously improve the capacity building and modernization of ecological and environmental governance in the basin, and provide solid institutional guarantees for environmental pollution management in China.