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China is currently trying to improve the quality of the environment by developing a series of environmental regulations. However, conflicts of interest between the national government, local governments, and enterprises often negatively affect the implementation of such policies. This study conducted a theoretical analysis of the evolutionary stable strategies of the national government, local governments, and enterprises in China, to explore the factors that influence the strategies of various stakeholders and examine incentive-compatible environmental regulation policies, by using a tripartite evolutionary game model. Numerical simulations were introduced to examine the asymptotic stability of various evolutionary stabilization strategies and the effects of parameter variation on these strategies. The results demonstrate that national government supervision is critical to achieving the goals of environmental regulation policies since the supervision costs can influence the final evolutionary stable strategy. Although the employment losses caused by environmental regulation will affect the national government's payoffs, the national government's strategy depends on the costs and expected benefits of the strategy itself. Moreover, increased default penalties and compliance incentives can encourage local governments to enforce environmental regulations more effectively, thereby alleviating conflicts of interest among various stakeholders. Therefore, non-democratic and non-Western states need to design incentive-compatible environmental regulation policies according to various influencing factors to coordinate the interests of stakeholders. • A theoretical framework is established based on tripartite evolutionary game model. • National government supervision is critical for goals of environmental regulation. • Employment losse isn't the primary factor for national government decision-making. • Penalty and incentive alleviate conflicts of interest among various stakeholders. [ABSTRACT FROM AUTHOR]

How to rely on market mechanism for achieving industrial sustainable development is an important issue both to current scholars and policymakers. Technological innovation is regarded as a mediator to construct a driving mechanism that flexible environmental policy affects sustainable development from the "narrow" perspective of Porter's hypothesis. Meanwhile, environment regulatory enforcement is introduced as a moderator to explore the institutional scenario that drives sustainable development of China's industry. Then we have adopted industrial panel data of 30 provinces in 2006–2015 and employed the sys-GMM method for empirical test. The findings show that: (1) flexible environmental policy can significantly facilitate industrial sustainable development. (2) Flexible environmental policy has a significantly positive impact on technological innovation. Meanwhile, technological innovation is significantly and positively related to industrial sustainable development, and technological innovation partially mediates the relationship between flexible environmental policy and industrial sustainable development. (3) Environment regulatory enforcement positively moderates the relationship between flexible environmental policy and technological innovation. However, it has a potentially positive but not significant moderating impact on the relationship between technological innovation and industrial sustainable development, indicating that there is still an "implementation gap". (4) From a regional point of view, technological innovation has partly mediating effects between flexible environmental policy and industrial sustainable development in the eastern and western regions, and environmental regulatory enforcement can positively moderate the role of flexible environmental policy in promoting technological innovation in the eastern region. Finally, this paper puts forward the policy implications. • Flexible environmental policy can significantly spur industrial sustainable development. • Technological innovation can significantly spur industrial sustainable development. • Technological innovation partly mediates the relationship between flexible environmental policy and industrial sustainable development. • Environment regulatory enforcement plays a positive moderating role between flexible environmental policy and technological innovation. [ABSTRACT FROM AUTHOR]

Environmental problems are among the world's major challenges. To alleviate the environmental pressure caused by rapid economic growth, many governments have implemented a series of environmental regulation policies to reduce energy consumption and pollutant emissions. While existing studies have shown that environmental regulations can affect industrial development, the impact of environmental regulations on industrial structure upgrading in regional development remains unclear. This paper studies such an impact by quantitatively analyzing the environmental policies of the Beijing-Tianjin-Hebei region in China and provides insightful recommendations for regional integration governance. By analyzing the policy texts from 2003 to 2014, this paper defines a series of indices to quantify the policy objective of industrial structure upgrading and six types of policy measures. Based on these quantitative indices, this paper builds econometric models to study the spatial effect and time-lag effect of environmental regulations on industrial structures. The main findings include: (1) the environmental regulations in these three regions have no influence on each other, yet the upgrading of industrial structures shows significant negative spatial dependence; (2) environmental regulations have direct and indirect spatial effects on industrial structures across regions; and (3) environmental regulations have a long-term promotion effect on industrial structure upgrading, and economic measures tend to be more effective than noneconomic measures. This paper provides insights into the importance of the integrated development across regions of environmental regulations and industrial development. This paper also shows the significant effectiveness of economic measures of environmental regulations for industrial structure upgrading. • Environmental regulations can help to upgrade local industrial structure. • Without coordination, regulations in one region can harm its neighboring regions. • Effects of environmental regulations on industrial structure tend to be long-term. • Economic measures in environmental regulations tend to be more effective. [ABSTRACT FROM AUTHOR]