Green Revolution vs. Digital Leap: Decoding the Impact of Environmental Regulation on New Quality Productive Forces in China’s Yangtze River Basin

The development of New Quality Productive Forces (NQPF), fueled by simultaneous progress of informatization, digitalization, and ecologization, creates a transformative sustainability framework that connects economic growth and environmental protection. People usually think that environmental regulation enhances regional ecologization, thereby boosting total NQPF. Does this hold true for China’s Yangtze River Basin? Utilizing panel data from 2015 to 2022, this study examines the impact of environmental regulation on NQPF across 86 prefecture-level cities in the basin. Our empirical results corroborate that environmental regulation exerts a statistically significant positive effect on digital NQPF development, which in turn contributes substantially to overall NQPF enhancement—This finding remains robust across alternative estimation methods. Our analysis further identifies three primary mechanisms driving this effect: industrial upgrading, technological innovation, and GDP growth. The effect is nonlinear and characterized by a threshold: in less developed areas, environmental regulation somewhat helps, whereas in more developed regions, reaching a certain strength significantly enhances both digital and overall productivity. Furthermore, environmental regulation demonstrates notable spillover effects: they enhance local outcomes while simultaneously improving digital and overall NQPF in neighboring regions. These findings offer strong evidence and valuable policy insights for advancing the digital transformation and high-quality sustainable development of the Yangtze River Basin.