Greening through growth: Industrial upgrading, environmental governance, and urban green space in China

This study examines how industrial structure upgrading influences urban greening in Chinese cities using panel data from 290 cities spanning 2007 to 2023. Employing fixed-effects models with multiple robustness checks including instrumental variable estimation, propensity score matching, and Heckman selection correction, we find that transitioning toward service-oriented economic structures significantly increases urban green coverage. The results remain consistent across alternative measurements and sample specifications. We investigate the mechanisms and conditions underlying this relationship through mediation and moderation analyses. The findings reveal that industrial upgrading enhances urban greening partially through two channels: increasing government environmental protection expenditure and improving energy utilization efficiency, with each pathway accounting for approximately 5% of the total effect. Population density negatively moderates this relationship, as densely populated cities face spatial constraints that limit their ability to expand green spaces despite economic transformation. Heterogeneity analysis demonstrates that cities participating in environmental policy programs such as Low-Carbon City and Sponge City initiatives experience substantially larger greening benefits from industrial upgrading compared to non-participating cities, highlighting the critical role of environmental governance frameworks. These findings contribute to understanding how economic modernization intersects with environmental sustainability at the urban level. The study offers practical insights for policymakers, suggesting that promoting industrial structure optimization, expanding environmental fiscal investment, enhancing energy efficiency, and implementing supportive governance institutions represent complementary strategies for achieving greener, more sustainable cities. The research underscores that economic development and environmental quality can be mutually reinforcing when appropriate policies and planning mechanisms are in place.