Environmental Regulation, Economic Network and Sustainable Growth of Urban Agglomerations in China

Zhaohui Chong, Chenglin Qin and Xinyue Ye
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Zhaohui Chong: School of Economics, Jinan University, Guangzhou 510632, China
Chenglin Qin: School of Economics, Jinan University, Guangzhou 510632, China
Xinyue Ye: Department of Geography, Kent State University, Kent, OH 44242, USA

Sustainability, 2016, vol. 8, issue 5, 1-21

Abstract: In this paper, we examine the influence of environmental regulation on sustainable economic growth from both theoretical and empirical perspectives. Our research is twofold. First, we apply a modified NEG (New Economic Geography) model to analyze how environmental regulation influences firms’ location choices and cities’ sustainable economic growth. Second, we test a spatial econometric model employing panel data of the three largest urban agglomerations in China from 2003 to 2013 to study the relationship between environmental regulation and sustainable economic growth as well as the spillover channels of economic activities. The results reveal a remarkable negative effect of environmental regulation on economic growth. In addition, we find no sufficient evidence to prove the existence of long-term effects of environmental regulation on economic growth in the three urban agglomerations. Furthermore, using different weight matrices to illustrate the different economic networks of the urban agglomeration, we validate the difference in spillover mechanisms across these three urban agglomerations. Specifically, the disparity in environmental regulation acts as a spillover channel for the Yangtze River Delta and the Pearl River Delta, while it is not significant for Jing-Jin-Ji.

Keywords: environmental regulation; urban agglomeration; economic growth; spillover channels; economic network (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 (24)

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