Does wealthier mean ecology? The Impact of Economic Growth on Blue Infrastructure Expansion

Abstract In the context of rapid urbanization and high-quality development, Blue Infrastructure (BI) has transitioned from passive natural remnants to critical spatial carriers supporting urban resilience and livability. However, the relationship between urban economic development and BI remains heavily debated, characterized by the competing mechanisms of spatial encroachment and governance support. Using panel data from 286 prefecture-level cities in China spanning from 2000 to 2022, this study employs a Two-Way Fixed Effects (TWFE) model and a mediation model to empirically investigate the net effect of economic growth on BI and the transmission mechanism of local fiscal expenditure intensity. The results reveal three main findings. First, economic growth exerts a significant positive overall effect on BI at the national level, indicating that the governance support effect driven by resource accumulation outweighs the pressure of development encroachment. Second, contrary to the assumption of a smooth fiscal bridge, local fiscal capacity exhibits a significant "masking effect" in the transmission pathway. Rapid economic expansion dilutes relative fiscal expenditure intensity, which in turn partially offsets the potential ecological dividends that economic growth could have released. Third, the transformation chain exhibits profound regional heterogeneity: the Eastern region achieves relatively smooth conversion; the Central region presents a typical masking effect during its rapid economic catch-up; whereas the Western and Northeastern regions face a dual blockage where both the direct growth-driven pathway and the fiscal transmission mechanism fail to function. This study suggests that BI is not an automatic byproduct of economic growth but a conditionally transformed institutional outcome. Bridging the growth-ecology gap essentially requires sustained fiscal intensity, optimized public resource allocation, and targeted spatial governance strategies tailored to specific regional development stages.