The existence and mechanism of the domestic pollution haven hypothesis: evidence from 265 cities in China

Shimei Wu () and Haotian Zhang
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Shimei Wu: Hunan University
Haotian Zhang: University of Birmingham

Letters in Spatial and Resource Sciences, 2022, vol. 15, issue 3, No 2, 287-310

Abstract: Abstract This paper provides a synthetic framework for the verification of the existence and mechanism of the Domestic Pollution Haven Hypothesis (DPHH). We infer the existence of DPHH by estimating the Spatial Environmental Kuznets Curve (SEKC). Results show that the SEKC exists significantly at the city level in China with a U-shape, which supports the DPHH. Based on the pollution transfer calculated from a traditional EKC, we estimate the strategic responses of cities towards the behavior of neighboring cities, by using the Two-Regime Spatial Durbin Model (TR-SDM). We find that the “Race to Bottom/Excellence” strategy dominates the pollution transfer at the city level in China. This paper has important policy implications for the environmental inspection and the differentiation of foreign industries.

Keywords: Pollution Haven Hypothesis; Spatial Environmental Kuznets Curve; Two-Regime Spatial Durbin Model; Race to Bottom (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s12076-021-00285-2

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