3.4.2. Substitution Variable

This paper verifies the stability of the benchmark model from two aspects. One aspect is to recalculate the environmental regulation variables. This paper refers to the idea of Chen et al. [72] to calculate the proxy variables of environmental regulation. First, the proportion of the occurrences of environment-related words in the provincial government work report to the total words in the report is selected. Then, the ratio of the total industrial output value of the prefecture-level city is multiplied by the total industrial output value of the province. Lastly, it calculates the proxy variables of environmental regulation of prefecture-level cities. Columns (1) and (2) of Table 8 report the estimated results of the recalculated environmental regulation variables. Environmental regulation has a positive impact on HQD, and it is significant at the 1% statistical level; the interaction term between environmental regulation and local government competition is significantly negative at the 1% statistical level. The second aspect is to recalculate local government competition variables. This paper uses per capita FDI as a measure of local government competition. Columns (3) and (4) of Table 8 report the estimated results of recalculating the local government competition variables. Environmental regulation has a positive impact on HQD, and it is significant at the 1% statistical level. In addition, local government competition still has a significant inhibitory effect on the high-quality growth effect of environmental regulation. The above two methods further confirm that environmental regulation can significantly improve the HQD level of the YRB, and they confirm the robustness of the estimation results of the benchmark model.

**Table 8.** Robustness test results: recalculating environmental regulation and local government competition variables.


Notes: \* *p* < 0.10, \*\*\* *p* < 0.01; numbers in parenthesis are robust standard error.

#### **4. Discussion**

Existing research suggests that increasing the intensity of environmental regulation can promote economic growth and improve environmental conditions [21,22]. This paper constructs a comprehensive index of HQD, which is different from the previous single index, and it analyzes the impact of environmental regulation on HQD. In addition, it also analyzes the changes in the impact of environmental regulation on HQD under the condition of the increased competition intensity of local governments.

This paper confirms that the impact of environmental regulation on HQD is positive and significant at the 1% statistical level. The stronger the regional environmental regulation is, the higher the threshold for enterprises to enter. This will force high-pollution enterprises to improve green production processes by adjusting their product structure, environmental protection technology, and other production behaviors. This method will promote the greening and high added value of the production process and, ultimately, achieve the goals of reducing pollution, improving environmental quality, and achieving a win–win situation for the economy and the environment [73]. However, companies with "high pollution, high emissions, and high energy consumption" will move out of areas with high levels of environmental regulation, thereby providing development space for other companies that meet environmental regulation standards. The environmental regulation will promote the optimization of the region's industrial structure to a green and sustainable structure, in order to protect the ecological environment and promote the sustainable development of the local economy, thereby further improving the HQD level of the region [74].

This paper also reveals that the coefficient of the interaction term of environmental regulation and local government competition is negative and significant at the 1% statistical level. In addition, when the local government competition represented by the level of economic catch-up exceeds the threshold value of 3.037, this positive effect of environmental regulation on HQD decreases significantly. On the one hand, local governments pursue short-term interests, tend to attract liquidity such as external investment, and reduce investment in public services such as environmental protection [43]. When local governments unilaterally pursue economic development, they often lower environmental standards, and it is difficult to implement environmental regulatory measures effectively [42]. Local governments implement more relaxed environmental governance methods to attract more foreign investment or investment from enterprises in other regions, which, in turn, leads to investment and tax competition between regions, further leading to environmental pollution deterioration. Therefore, local government competition weakens the role of environmental regulation in promoting HQD.

The main contributions of this paper are as follows: (1) Most of the previous studies focused on the whole country or province and measured the HQD level in a cross-section or a short time. Due to the multi-dimensional attributes of HQD with rich connotations, this paper builds a more comprehensive and longer-term HQD index system for prefecture-level cities. (2) This paper incorporates environmental regulation, local government competition, and HQD into the same analytical framework. It adds their interaction terms to explore the combined effect of environmental regulation and local government competition, a supplement to the existing research. (3) This paper constructs a panel threshold model with local government competition as the threshold variable to explore the possible nonlinear relationship between environmental regulation and HQD. (4) This paper uses the generalized method of moments (GMM) to solve the endogeneity problem. Therefore, the reliability of the empirical results is verified. (5) From the perspective of regional heterogeneity, the HQD effects of environmental regulation in the Yellow River basin's upper, middle, and lower reaches are tested to explore the path for improving the HQD of the YRB.

This paper has the following limitations, which can be further improved in the future: The research area of this paper is the YRB; future research should be extended to other river basins, and a comparative analysis should be carried out. In addition, the HQD index system does not consider the issue of carbon emissions and the efficiency of hydropower utilization. In the future, it is necessary to further improve the connotation and evaluation index system of HQD. Lastly, the impact of environmental regulation on HQD does not consider the spatial effect of environmental regulation. Therefore, in future research, it is necessary to further analyze the impact of environmental regulation on HQD from a spatial perspective.

#### **5. Conclusions**

This paper analyzes the impact of environmental regulation and local government competition on the HQD of the YRB. The results show that environmental regulation has a significant positive impact on HQD. The competition between local governments has an inhibitory effect on the improvement of HQD. Otherwise, with the intensification of competition among local governments, the role of environmental regulation in promoting HQD weakens. Between the development of the economy and the protection of the environment, the local government chooses the speed of economic development, but it ignores the quality of economic development and destroys the ecological environment. Under the single-threshold model, the impact of environmental regulation on HQD has a significant nonlinear positive effect on the improvement of local government competition. Still, when the local government competition exceeds the threshold of 3.037, this positive effect decreases significantly. Regarding the heterogeneity analysis, environmental regulation has a greater effect on the lower reaches of the YRB.

Therefore, further strengthening the environmental regulation of the whole basin is necessary. By promulgating the regulations and policies related to pollution prevention and control, environmental supervision and other means of restraining the pollutant discharge behavior of economic entities are strengthened. The government should use the market mechanism in order to actively motivate enterprises to update methods to reduce pollution emissions. The efficiency of regulation should be improved through voluntary regulatory means, such as environmental information disclosure and participation systems; pollution should be reduced; and the goal of harmonious development between economy and nature should be sought. Moreover, it is necessary to regulate the competition of local governments. The government should optimize the promotion assessment system with economic growth as the single goal or increase the weight of environmental indicators in the assessment system to promote the YRB in order to achieve a high-quality economic– ecological–environmental development model. Lastly, it is necessary to implement different environmental regulation methods with different intensities according to the regional heterogeneity of the upper, middle, and lower reaches. The upstream should appropriately control the intensity of environmental regulation, and incentive-type and guiding-type regulatory policies should be chosen, such as ecological compensation, to provide sufficient cost compensation and income guarantee for ecological protection. The downstream should increase the intensity of environmental regulation, promote the innovation compensation effect, and transform industrial upgrading and the green development model.

**Author Contributions:** Author Contributions: Conceptualization, Y.Z.; methodology, Y.W.; software, Y.W.; validation, Y.W.; formal analysis, Y.W.; investigation, Y.Z.; resources, Y.Z.; data curation, Y.Z. and Y.W.; writing—original draft preparation, Y.W.; writing—review and editing, Y.J.; visualization, Y.J.; supervision, Y.Z.; project administration, Y.Z.; funding acquisition, Y.Z. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research was funded by the key project of the National Social Science Foundation of China (No. 21AZD042) and the special project for cultivating leading talents in philosophy and social sciences in Zhejiang Province (No. 21YJRC06ZD, 21YJRC06-2YB).

**Data Availability Statement:** Publicly available datasets were analyzed in this paper. This data can be found here: https://data.cnki.net/Yearbook/Single/N2021050059 (accessed on 1 May 2022).

**Acknowledgments:** The authors are grateful to the editors and the anonymous reviewers for their insightful comments and helpful suggestions.

**Conflicts of Interest:** The authors declare no conflict of interest.

#### **References**


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