ORIGINAL RESEARCH article
Front. Environ. Sci.
Sec. Environmental Economics and Management
Assessing the Spatial Spillover Effects of the Middle Route of the South-to-North Water Diversion Project
Provisionally accepted
- 1School of Economics and Managemen, Zhoukou Normal University Library, Zhoukou, China
- 2School of Business and Economics, Universiti Putra Malaysia, Serdang, Malaysia
- 3School of International Trade and Economics, University of International Business and Economics, Beijing, China
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The Middle Route of the South-to-North Water Diversion Project has alleviated water supply-demand imbalances in North China and generated notable economic, social, and ecological benefits. To address the potential bias of traditional difference-in-differences (DID) models that neglect spatial spillover effects, this study employs a spatial DID approach to examine the project's impacts on both water-receiving areas and their neighboring regions. The results show that the project significantly promotes industrial structure rationalization and upgrading, built-up area expansion, and carbon productivity in water-receiving areas, while also producing positive spillover effects in non-receiving areas. However, only carbon productivity exhibits spatial synergy effect among water-receiving areas, reflecting a "strong–strong cooperation" pattern. In addition, the spillover effects exhibit a clear distance-decay pattern within approximately 200 km of the water-receiving areas. Extended analyses indicate that the project substantially promotes the development of secondary and tertiary industries while negatively affecting the primary industry in water-receiving areas, whereas all three sectors show positive spillover effects in non-receiving areas. Furthermore, enterprises play a mediating role in the spillover effects related to industrial structure upgrading and carbon productivity. These findings suggest policy design should strengthen cross-regional governance coordination, improve the alignment between industrial restructuring and water-use patterns, and enhance firms' upgrading in water-saving and green technologies, thereby ensuring the full and sustainable realization of the project's benefits.
Keywords: Carbon productivity, County Development, industrial structure rationalization, Industrial structure upgrading, spatial difference-in-differences model, Spatial spillover effect, The Middle Route of the South-to-North Water Diversion Project
Received: 15 Sep 2025; Accepted: 02 Feb 2026.
Copyright: © 2026 Cao, Shi, Soh, Razakb and Noordin. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Weini Soh
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