**1. Introduction**

The high-quality development (HQD) of river basins is a concern of various governments, and it plays a vital role in developing the surrounding economy and ecological protection. The 2021 UN Environment report Making Peace with Nature states that "by embodying the value of nature in policies, plans, and economic systems, we can direct investment into activities that restore nature" [1]. However, industrialization and urbanization have caused environmental pollution, resource depletion, and ecological degradation in the Yangtze River, the Yellow River, and other river basins. The contradiction between the "development and protection" of the basin urgently needs to be resolved. The Chinese government attaches great importance to the HQD of river basins. Meanwhile, the government has formulated national strategies, such as ecological protection and the HQD of the Yellow River basin (YRB). The YRB is a critical economic zone in the country. It is a vital area for winning the battle against poverty, and it has an important strategic position in national economic and social development and ecological security construction [2]. As a natural defense system to prevent environmental and ecological security from being damaged, the YRB is of great significance to ecological protection and construction [3]. The report of the 19th National Congress of the Communist Party of China in 2017 stated that "the national economy has shifted from a stage of high-speed growth to a stage of high-quality development". According to "The Outline of the Yellow River Basin Ecological Protection and High-quality Development Plan 2021" released by the Central Committee of the Communist Party of China and the State Council, the principles of ecological

**Citation:** Zhang, Y.; Wang, Y.; Jiang, Y. Environmental Regulation, Local Government Competition, and High-Quality Development—Based on Panel Data of 78 Prefecture-Level Cities in the Yellow River Basin of China. *Water* **2022**, *14*, 2672. https:// doi.org/10.3390/w14172672

Academic Editors: Qiting Zuo, Xiangyi Ding, Guotao Cui and Wei Zhang

Received: 28 July 2022 Accepted: 26 August 2022 Published: 29 August 2022

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**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

protection and HQD must be grasped in the YRB, ecological priority must be adhered to, green development must be boosted, and the road of sustainable HQD must be taken. The YRB suffers from water shortages, severe environmental pollution [4,5], insufficient livelihood development, and significant regional differences in resource endowments [6]. The economic connections of the provinces and regions along the Yellow River are low, and the HQD is insufficient [7]. In the process of promoting HQD, environmental regulation, as an essential means of controlling pollution and reducing emissions, can motivate the technological renewal of the enterprise [8]. It plays a vital role in the win–win process of economic growth and ecological protection in the YRB. Therefore, it is of great theoretical and practical significance to build a comprehensive evaluation system for HQD in the YRB and to make reasonable measurements in order to clarify the impact of environmental regulation on HQD.

Currently, the literature on HQD focuses on the definition of connotation and the construction of the evaluation index system. HQD encompasses high-efficiency, fair, green, and sustainable development, and its goal is to meet people's growing needs for a better life [9,10]. There are two methods for measuring the HQD index: the first method is the measurement of a single indicator. HQD is mainly measured by indicators, such as total factor productivity [11,12], value-added rate [13,14], the intermediate input–output ratio of enterprises, investment efficiency, and labor productivity growth [15,16]. In addition, with the increasing attention to resource and environmental issues, many scholars have constructed indicators of green/ecological total factor productivity [17,18]. The second method is measurement based on the comprehensive index system. However, a unified evaluation system has not yet been formed. Most existing studies have constructed an evaluation index system based on the new development concept of "innovation, coordination, green, openness, and sharing" [8,19,20].

Regarding the research on environmental regulation and economic development, there are three main viewpoints. The first viewpoint is based on the "Porter Hypothesis", which holds that environmental regulation promotes the improvement of the economic level [21,22]. The implementation of environmental regulation policies will stimulate scientific and technological innovation, thereby driving the improvement of total factor productivity and offsetting the environmental governance costs of enterprises. Therefore, enterprises will improve production technology, promote production technology into clean technology, and realize the transformation and upgrading of industrial structure. Ultimately, this will drive the HQD of the regional economy [23]. In addition, some scholars have explored the heterogeneity of environmental regulation on economic growth and found that environmental regulation has a significant role in promoting HQD in the central and eastern regions of China, though it has no significant impact on the western region [24]. In addition, some scholars found an obvious mutual promotion relationship between environmental regulation and economic growth [25,26]. The second viewpoint is based on the following cost effect, which holds that environmental regulation hinders the improvement of the economic level [27,28]. In the short term, enterprises will need to invest much human and material capital in technological innovation. This will lead to enterprises' costs far exceeding the economic benefits. Therefore, enterprises will lose their enthusiasm for green investment [29]. The third viewpoint is the nonlinear relationship, showing an "inverted U-shaped" relationship [30,31]. There is heterogeneity between regions. There is a cost effect in eastern China, an innovation compensation effect in central China, and the strengthening of environmental regulations in western China will inhibit economic growth [32].

The research on local government competition focuses on discussing whether the central government should decide on environmental issues in a centralized or local government in a decentralized governance model. Due to the public nature and externality of the environment, the benefits obtained by local environmental governance will spill over to neighboring governments, and the responsibility for environmental pollution will be shared by neighboring governments, resulting in the "free-rider" phenomenon [33].

In addition, local governments tend to relax environmental regulations to compete for liquid capital, resulting in an environmental "race to the bottom" between regions [34]. Woods [35] found that the state governments in the United States relaxed environmental regulations to attract external companies, resulting in environmental degradation. Some studies have proven the existence of a "race to the bottom" in China's local government environment [36–38]. In the eastern region of China, local government competition can improve the neighboring ecological environment, but in the central and western regions, it will aggravate the neighboring environmental pollution [39]. The rapid development of China's economy benefits from a vertical political management system and economic decentralization [40]. Under this system, GDP is an essential basis for promoting officials, so it plays a considerable incentive in improving local economic development [41]. However, it will lead local governments to pay more attention to short-term political performance and to ignore long-term economic growth [42]. In addition, to receiving a promotion, officials will implement looser environmental governance methods to attract foreign or local enterprise investment [43], which results in regulatory failure and environmental degradation [44]. This is not conducive to the coordinated development of the economy–ecology–environment, which is not conducive to improving HQD.

In summary, the existing studies have both theoretical and empirical levels. However, there are still certain deficiencies: (1) Although there have been many explorations of the measurement of HQD level, due to the short time since it was proposed, the theoretical basis for the construction of HQD indicators is insufficient. In the selection of indicators, many indicators reflect economic development, industrial structure, and growth rate, while few reflect the improvement of people's livelihoods. (2) Most of the existing literature focuses on the one-way relationship between environmental regulation and economic growth or between local government competition and economic growth. However, there are few studies on environmental regulation and HQD from the perspective of local government competition. Therefore, this paper uses the data of prefecture-level cities in the YRB from 2004–2019 to empirically analyze the effect of environmental regulation and local government competition on HQD.

Based on the above analysis, this paper proposes the following research hypotheses:

**Hypothesis 1 (H1).** *Environmental regulation can improve the HQD level of the YRB.*

**Hypothesis 2 (H2).** *Under the effect of local government competition, the role of environmental regulation in promoting HQD in the YRB is weakened.*

**Hypothesis 3 (H3).** *The impact of environmental regulation on the HQD of the YRB presents a nonlinear characteristic with the enhancement of local government competition intensity.*

#### **2. Materials and Methods**

#### *2.1. Research Scope and Data Sources*

The Yellow River is the second largest river in China, with a total length of 5464 km. It originates from the Qinghai–Tibet Plateau, flows through nine provinces (autonomous regions) from west to east, and flows into the Bohai Sea in Dongying City, Shandong Province. There are huge differences in the topography and landforms in the basin, large differences in altitude, and obvious differences in the natural environment. The YRB is a belt rich in energy resources, with obvious advantages in hydropower, coal, oil, and natural gas, and it has rich and diverse mineral resources. The natural conditions of the YRB and the regions it passes through are very different, and the economic development is unbalanced. For example, the total GDP of Shandong Province in 2020 is 24.33 times that of Qinghai Province. The problem of unbalanced and insufficient development between regions is prominent. In addition, the YRB has various ecological function types and various nature reserves, and it is the ecological security and ecological optimization belt in China.

The YRB includes nine provinces (autonomous regions). Among them, there is a serious lack of data on Haidong City and autonomous prefectures; Sichuan Province only flows through a small area of the YRB; Inner Mongolia's Dongsimeng belongs to the broad northeast region; Laiwu City was merged into Jinan City in Shangdong Province in 2019. Therefore, this paper excludes the above cities and selects 78 prefecture-level cities in the YRB as the research objects. Maps were generated using ArcGIS 10.8, as shown in Figure 1. The data mainly come from the "China Environmental Statistical Yearbook", "China Urban Statistical Yearbook", the statistical yearbooks of various cities, the National Bureau of Statistics website, and the EPS database. The YRB includes nine provinces (autonomous regions). Among them, there is a serious lack of data on Haidong City and autonomous prefectures; Sichuan Province only flows through a small area of the YRB; Inner Mongolia's Dongsimeng belongs to the broad northeast region; Laiwu City was merged into Jinan City in Shangdong Province in 2019. Therefore, this paper excludes the above cities and selects 78 prefecture-level cities in the YRB as the research objects. Maps were generated using ArcGIS 10.8, as shown in Figure 1. The data mainly come from the "China Environmental Statistical Yearbook", "China Urban Statistical Yearbook", the statistical yearbooks of various cities, the National Bureau of Statistics website, and the EPS database.

Qinghai Province. The problem of unbalanced and insufficient development between regions is prominent. In addition, the YRB has various ecological function types and various nature reserves, and it is the ecological security and ecological optimization belt in China.

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**Figure 1.** Map of the study area. **Figure 1.** Map of the study area.
