Abstract: The importance of the logistics industry to economic development is becoming more and more obvious, meanwhile, as a highly polluting industry, its impact on the environment has also become an important breakthrough point in the transformation and development of the logistics industry. Innovation is one of the important means to solve this problem. Based on the data of China’s 285 prefecture-level cities, this paper constructs an interaction term model and a threshold model to verify the relationship between environmental regulation, innovation, and the development level of the logistics industry. The empirical results show that the interactive effect of environmental regulation and innovation has a significantly negative impact on the development of the logistics industry. When the level of innovation is not high, the excessive environmental regulations will hinder the development of the logistics industry. The results of the heterogeneity test show that the negative effect of the interaction effects and the positive effect of innovation on the development of the logistics industry are significant in the samples with clear and quantitative description of environmental targets, but not significant in the samples with unclear and no quantitative description of environmental targets. The findings of the threshold regression show that the environmental regulation has a first-negative-then-positive influence on the development level of the logistics industry through the threshold variable of innovation. Therefore, when formulating environmental regulation policies, the government should adopt appropriate environmental regulation intensity and measures according to the regional innovation levels.

Key words: environmental regulation, logistics industry, innovation, threshold effect, interactive effect