Environmental Regulation and Green Investment Efficiency: Threshold and Spatial Spillover Analysis for China

To achieve the mutual coordination and sustainable development of ecology and the economy, China has been consistently strengthening its environmental regulations while simultaneously bolstering the green investments of heavily polluting enterprises. This study utilizes panel data from heavily polluting enterprises between 2017 and 2022. Firstly, it employs the SBM-DEA method to quantify the green investment efficiency of the sampled enterprises. Secondly, it constructs panel threshold and spatial autoregressive models to investigate how environmental regulations impact the efficiency of green investments by these enterprises. The findings indicate that the green investment efficiency of heavily polluting enterprises in China is low. The relationship between environmental regulations and green investment efficiency exhibits double threshold effects and spatial spillover effects, forming an inverted “N” shape. After incorporating internal control factors, the threshold effect persists, displaying an inverted “N” shape, but with a broader promotion interval. These findings are crucial for formulating government policies on environmental regulation intensity, optimizing the efficiency of corporate green investment, and advancing the practice of sustainable development.