How does government intervention affect regional air pollution? The role of intergovernmental tax competition and local environmental regulation

The behavioral motivation and decision-making incentives of local governments are key aspects that affect the effectiveness of environmental management. This study takes Chinese local governments as the research object, selects the provincial dynamic panel data of Chinese Mainland from 2007 to 2020 for empirical estimation, and confirms that local government intervention plays an important role in the environmental pollution management of the jurisdiction: Under a single task orientation, tax competition will exacerbate air pollution, while environmental regulations will alleviate air pollution; Under the premise of parallel tasks and limited resources, these two local strategies have a restraining effect on each other and perform as a nonlinear relationship. The ultimate result is that the positive effects of environmental regulations cannot reverse the negative effects of tax competition. Furthermore, we introduced a spatial model and confirmed that there is an obvious spatial correlation between local government behavior. In the promotion tournament and “beggar thy neighbor” competition mode, local governments transfer the negative impact of tax competition to other regions, while keeping the positive impact of environmental regulations within their jurisdiction.