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Does neighboring green development benefit or suffer from local economic growth targets? Evidence from China

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  • Ge, Tao
  • Li, Chunying
  • Li, Jinye
  • Hao, Xionglei

Abstract

This study explores whether green development benefits or suffers from economic growth targets. Although prior research has highlighted various aspects of green development, the impact of performance targets, which are set by authorities as a baton of macroeconomic policy, remains largely unexplored. Using data from 285 cities in China over the period 2005–2018, we employ a spatial Durbin model to examine the role of economic growth targets in green development. Results show that green total factor productivity is improved while pollution emission intensity is increased, suggesting that economic growth targets are a double-edged sword that promotes green development modes yet inhibits green development effects. Mixed results are also observed in surrounding areas; however, their magnitudes are spatially attenuated. Furthermore, a channel analysis reveals that the outcome is influenced by green innovation and resource misallocation in the region as well as by strategic interaction and transboundary pollution in neighboring regions.

Suggested Citation

  • Ge, Tao & Li, Chunying & Li, Jinye & Hao, Xionglei, 2023. "Does neighboring green development benefit or suffer from local economic growth targets? Evidence from China," Economic Modelling, Elsevier, vol. 120(C).
    • Handle: RePEc:eee:ecmode:v:120:y:2023:i:c:s0264999322003868
    DOI: 10.1016/j.econmod.2022.106149
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    More about this item

    Keywords

    Economic growth targets; Green development; Spillover effects; Spatial econometric model; China;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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