The construction industry is facing severe environmental challenges while driving economic development. This study addresses the theoretical debate over the effectiveness of environmental regulations and the insufficient research on their interactive mechanisms with digitalization. We construct a digitally enabled regulatory analytical framework to systematically examine the impact mechanisms of environmental regulations on the construction industry's green transformation and the dynamic moderating influence of digitalization.
Using panel data from 282 Chinese cities collected between 2010–2022, this study constructs a synergistic digitally enabled regulatory analysis framework. We innovatively employ large language models (LLMs) to conduct semantic analysis and quantify the intensity of provincial environmental policy texts. A nonlinear model examines the impact of environmental regulations on the construction industry's green transformation and the digital moderation mechanisms.
First, environmental regulations exhibit a pronounced U-shaped relationship with the construction industry's green transformation. Second, this U-shaped relationship dynamically changes with the level of digitalization across cities . As digitalization advances, the inflection point of the curve shifts, and the effects of stringent and lenient environmental regulations on the green transformation adjust accordingly. Third, mechanism analyses reveal that digitalization shapes regulatory outcomes by influencing cost effects and innovation compensation effects. Specifically, the cost burden can be alleviated at higher digitalization levels, and innovation compensation can be significantly enhanced, promoting the green transformation even under relatively moderate environmental regulations.
By explicitly linking digitalization levels with environmental regulatory policy intensity, this study constructs a dynamic analytical framework capable of reconciling existing opposing theoretical perspectives and proposes an innovative method for measuring environmental regulation intensity based on LLMs. The findings provide a theoretical foundation and practical pathway for promoting the construction industry's green transformation through the digitally enabled regulation framework and targeted policy measures.
