Yuqian Zhang Huanqi Luo ^* Chenchen Su ^* Chen Xu ^* Huijuan Wang ^*

• School of Economics, Minzu University of China, Beijing, Beijing Municipality, China

The transformation and upgrading of industrial structure constitutes a pivotal task for the sustainable economic development, and its factors are also of concern to developing countries around the world. Unfortunately, there is still relatively little systematic discussion on the impact of environment policy on industrial structure. Against this backdrop, we have employed the multi-period differences-in-differences (DID) model to assess the impact of the implementation of National Key Ecological Function Areas on industrial structure in the Yellow River Basin. Our findings reveal that this environment policy fosters the advancement of industrial structure but does not influence the rationalization of industrial structure.Regarding mediating effects, we confirm the positive impacts of population density and the investment in education. Furthermore, the policy effects are more pronounced in non-ethnic provinces with better basic conditions, whereas ethnic provinces exhibit almost no effect. The policy effects are more significant in large cities compared to small and medium-sized cities. These findings enrich the existing exploration of the impact of environment policy on industrial structure. In addition, it provides a strong reference for policy practice in developing countries.