There are complex correlations between environmental regulation and economic growth. In the short term

environmental regulation does create more "compliance costs" for the economy. But in the long run

it will promote economic growth through "innovation compensation" and "structural effects". This paper first interprets the mechanisms of environmental regulation driving economic growth through three transmission paths systematically. Then

it designs a chain multi-mediation model to test the effects of environmental regulation on economic growth from national and regional levels respectively. The results show that at the national level

environmental regulation drives economic growth through three paths: technological progress

industrial structure optimization and technological progress facilitating industrial structure optimization. From the regional level

there are obvious regional heterogeneities in the paths for environmental regulation to drive economic growth. In the eastern region

the mediation effect is not significant

and environmental regulation drives economic growth mainly through its direct effect; in the central region

there is a complete mediation effect

and environmental regulation significantly drives economic growth through all three mediations; and in the western region

environmental regulation mainly drives economic growth through one mediation

that is

industrial structure optimization.