Challenging the Pollution Haven Effect: Insights From the Yangtze River Delta's Regional Integration

ABSTRACT This study critically revisits the Pollution Haven Hypothesis (PHH), which suggests that stringent environmental regulations drive polluting industries to relocate to areas with laxer standards. Focusing on the context of China's national strategy for Yangtze River Delta (YRD) regional integration, we employ a difference‐in‐differences‐in‐differences (DDD) estimation approach alongside multi‐level panel data from 2003 to 2013 that exploits spatial and temporal variations in YRD expansion. We investigate whether regional integration facilitates the relocation of pollution‐intensive industries (PII) to less‐developed areas within the YRD. The analysis reveals that the integration boundary of YRD actually inhibits the transfer of polluting industries to peripheral cities in the region, though the trend of polluting industries shifting toward regional boundaries has strengthened. Thus the integration contributes to reducing the risk of becoming pollution havens for peripheral cities. These findings challenge the conventional PHH framework, indicating that regional integration can mitigate the PHH effects and limit the internal dispersion of pollution. Our results offer new insights into the influence of regional integration on the geographic distribution of polluting industries, highlighting the potential of coordinated regional governance to achieve both economic and environmental objectives.