An empirical study on ecological compensation in Southwest China utilizing the spatial difference-in-differences method based on national data

Ecological compensation policy for agriculture plays an important role in promoting both economic development and ecological environmental governance in karst regions. However, current research lacks sufficient quantitative evaluations and analyses of the governance effects and spatial spillover effects of ecological compensation policy in mountainous agricultural areas. This study employs data from China’s karst regions from 2005 to 2023 and adopts the difference-in-differences (DID) method combined with spatial econometric model to construct a spatial DID identification strategy, conducting an empirical analysis of the implementation effects and spatial spillover effects of ecological compensation policy. The results indicate that the ecology of mountainous agriculture in karst regions has been effectively restored. There is a gradual reduction in compensation value demand, and the degree of reduction has reached 8.20% in the recent decade. Ecological compensation policy for mountainous agriculture in karst regions results in a 7.52% significant growth in ecological compensation value, a 13.60% growth in social service value, an 11.40% growth in ecological environment value, and a 17.40% significant reduction in natural attribute value. The implementation of ecological compensation policy in China’s karst regions has significant inter-provincial negative spatial spillover effects, with only 0.200 of the overall policy earnings retained and 53.00% potential earnings offset by spatial spillover. The results of this study provide references for the coordinated governance of economic development and environmental protection in karst regions.