Polycentric Structure and Firms’ Environmental Performance: Evidence from China

Urban spatial structure has a crucial impact on the sustainable development of urban areas. Based on a unique firm-level panel data in China, a fixed-effect model is used to empirically study the influence of multi-center spatial structure on firm environmental performance. The research of this article draws three conclusions. First, the polycentric spatial structure has a significant negative effect on firms' COD emissions, which still holds after addressing the endogeneity issue and conducting robustness tests. Second, the effect of polycentric structure on reducing firms' COD emissions is weakened when the distance between cities in the regional network is too large. However, the development of high-speed rail and Internet will strengthen the role of polycentric structure for firms' COD emission reduction. The results of the intermediary effect test indicate that the polycentric structure indirectly controls firms' COD emissions through the partial intermediary effect of promoting market integration and factor mobility. Third, the role of polycentric structure on firms' COD emissions varies depending on the cities and positions where the firms are located. The polycentric structure can reduce firms' COD emissions more effectively when firms are located in higher density cities and lower development level cities. In contrast, the influence of polycentric structure on firms' COD emission reduction fails in western regions and administrative boundary counties. These findings can provide some empirical support for Chinese policy makers to promote polycentric development strategies.