Regional Competition, Heterogeneous Factors and Pollution Intensity in China: A Spatial Econometric Analysis

Jianhuan Huang and Jiejin Xia
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Jianhuan Huang: School of Economics and Trade, Hunan University, Changsha 410079, China
Jiejin Xia: School of Economics and Trade, Hunan University, Changsha 410079, China

Sustainability, 2016, vol. 8, issue 2, 1-26

Abstract: Regional competition may play an important role in the balance of environmental protection and economic growth. However, it is a pending issue of whether the competition among Chinese local governments leads to a race to black development or green development. This paper aims to explore the strategic interactions in provincial development in terms of an environment-economic indicator, i.e. , the pollution intensity in China from 2000 to 2013. We divide four predominant industrial pollutants into two groups according to whether the pollutant is regulated, and then test the strategic interactions among regions based on the spatial lag term by employing the spatial Durbin model. The results show that the heterogeneous factors, such as various pollutants and regional difference, may give rise to diversified competition strategies. We find that the “race to black development” hypothesis is not supported at the national level, and the “race to green development” hypothesis is established in the developed eastern regions only in terms of the regulated industrial pollutants. We also detect how pollution intensity is influenced by the direct and spatial spillover effects of environmental regulation and find that environmental legislation has been effective in reducing regulated pollutants’ pollution intensity, while the effects of environmental staff and investment are weak. Finally, some policy suggestions are discussed.

Keywords: pollution intensity; regional competition; adjacent competition mechanism; selective competition mechanism; environmental regulation; spatial spillover (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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