Based on the spatial lag of X model (SLX), we match the data collected from the Chinese Urban Yearbook, the Institute of Public and Environmental Affairs, and the Industrial Enterprise Database, and identify the causal relationship between neighboring environmental regulation and local pollution discharge. To solve the endogenous problem of environmental regulation，the air circulation coefficient is used as the instrumental variable. It is found that environmental regulation does cause pollution to be transferred nearby, and the conclusion is still valid after considering a series of robustness tests and placebo tests. Further discussion indicates the following points. The pollution transfer effect caused by environmental regulation reaches its peak value at 150 km, that is, the pollution is basically transferred to the nearby cities. With the passage of time, the pollution transfer effect has shown more obvious proximity feature in recent years. The environmental regulation not only improves the industrial scale of nearby cities, but also deepens the pollution degree of industrial structure. The exit barriers of the local enterprises help to alleviate the pollution transfer effect, and the enterprises’ state-owned nature fails to produce obvious neutralization effect. The above conclusions show that the current environmental regulation policies implemented by Chinese cities are not conducive to the overall environmental governance and only maximize the local short-term interests. Our policies should arrive at a consensus on the common goal of environmental governance.
