Air quality benefits of state-led industrial transfer: A staggered difference-in-differences analysis in Chinese cities

Urban air pollution poses grave risks to public health and undermines sustainable development, yet conventional regulatory approaches often face steep economic and political hurdles. In this paper, we investigate China's innovative National Industrial Transfer Demonstration Zones (NITDZ) as a bold, spatially targeted policy experiment in pollution control. Leveraging a natural staggered rollout across 298 prefecture-level cities between 2001 and 2020, we employ a staggered difference-in-differences framework—augmented by quantile regressions, mechanism analysis and moderation analysis—to reveal that NITDZ designation lowers annual PM₂.₅ concentrations. Mechanism analysis indicates that NITDZ reduces urban air pollution by promoting industrial upgrading and urban green innovation, while curbing the establishment of pollution-intensive enterprises. Crucially, cities with higher baseline pollution reap even greater marginal benefits, while those exhibiting strong local government environmental awareness amplify these gains further. By transforming industrial policy into an indirect emissions lever, our findings open new avenues for equitable, scalable urban climate strategies that harmonize economic rebalancing with air-quality objectives. • Industrial transfer policy reduces PM₂.₅. • Greater PM₂.₅ cuts in high-pollution cities. • High local environmental awareness amplifies gains. • Industrial relocation acts as an indirect emissions lever. • Spatial policy fosters urban climate resilience.