IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v18y2021i15p8050-d604479.html
   My bibliography  Save this article

How Does Income Inequality Influence Environmental Regulation in the Context of Corruption? A Panel Threshold Analysis Based on Chinese Provincial Data

Author

Listed:
  • Shi Wang

    (School of Economics and Finance, Xi’an International Studies University, Xi’an 710128, China
    Institute of Communication and Global Public Opinion, Xi’an International Studies University, Xi’an 710128, China
    “One Belt One Road” Economic and Trade Cooperation Innovation Team, Xi’an International Studies University, Xi’an 710128, China)

  • Wen Zhang

    (School of Economics and Finance, Xi’an International Studies University, Xi’an 710128, China)

  • Hua Wang

    (School of Foreign Studies, Xi’an Jiaotong University, Xi’an 710049, China)

  • Jue Wang

    (International Business School, Shaanxi Normal University, Xi’an 710119, China)

  • Mu-Jun Jiang

    (School of Foreign Studies, Xi’an Jiaotong University, Xi’an 710049, China)

Abstract

The question of how the income inequality of residents affects the level of environmental regulation in the context of official corruption was the core research issue of this study. We analyzed this problem using the panel threshold regression model from 26 provinces in China from 1995 to 2017. We found that when there is no official corruption, the widening of the residents’ income inequality promotes stricter environmental regulations; when the corruption problem is serious, the expansion of the residents’ income inequality leads to the decline in environmental standards; that is, the impact of residents’ income inequality on environmental regulation has a threshold effect due to corruption. In addition, the threshold effect due to corruption of all residents’ income inequality on environmental regulation is mainly generated by the urban residents’ income inequality and the urban–rural income inequality. This paper contributes to the literature that concentrates on the relationship between income inequality and environmental regulation, and shows that corruption is a key factor that can deeply influence that relationship. The research conclusion shows that increasing anti-corruption efforts can not only maintain national political stability, social fairness, and justice, but also be a powerful measure for environmental pollution governance.

Suggested Citation

  • Shi Wang & Wen Zhang & Hua Wang & Jue Wang & Mu-Jun Jiang, 2021. "How Does Income Inequality Influence Environmental Regulation in the Context of Corruption? A Panel Threshold Analysis Based on Chinese Provincial Data," IJERPH, MDPI, vol. 18(15), pages 1-18, July.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:15:p:8050-:d:604479
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/18/15/8050/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/18/15/8050/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edward Manderson & Richard Kneller, 2012. "Environmental Regulations, Outward FDI and Heterogeneous Firms: Are Countries Used as Pollution Havens?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(3), pages 317-352, March.
    2. Matthew A. Cole & Robert J. R. Elliott & Per G. Fredriksson, 2006. "Endogenous Pollution Havens: Does FDI Influence Environmental Regulations?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 157-178, March.
    3. Mallick, Hrushikesh & Padhan, Hemachandra & Mahalik, Mantu Kumar, 2019. "Does skewed pattern of income distribution matter for the environmental quality? Evidence from selected BRICS economies with an application of Quantile-on-Quantile regression (QQR) approach," Energy Policy, Elsevier, vol. 129(C), pages 120-131.
    4. Qiang Du & Yunqing Yan & Youdan Huang & Chanchan Hao & Jiao Wu, 2021. "Evolutionary Games of Low-Carbon Behaviors of Construction Stakeholders under Carbon Taxes," IJERPH, MDPI, vol. 18(2), pages 1-20, January.
    5. List, John A. & Co, Catherine Y., 2000. "The Effects of Environmental Regulations on Foreign Direct Investment," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 1-20, July.
    6. Scruggs, Lyle A., 1998. "Political and economic inequality and the environment," Ecological Economics, Elsevier, vol. 26(3), pages 259-275, September.
    7. Mongi Lassoued, 2021. "Control of corruption, microfinance, and income inequality in MENA countries: evidence from panel data," SN Business & Economics, Springer, vol. 1(7), pages 1-19, July.
    8. Hongyi Li & Lixin Colin Xu & Heng‐fu Zou, 2000. "Corruption, Income Distribution, and Growth," Economics and Politics, Wiley Blackwell, vol. 12(2), pages 155-182, July.
    9. Zhang, Chuanguo & Zhao, Wei, 2014. "Panel estimation for income inequality and CO2 emissions: A regional analysis in China," Applied Energy, Elsevier, vol. 136(C), pages 382-392.
    10. Baek, Jungho & Gweisah, Guankerwon, 2013. "Does income inequality harm the environment?: Empirical evidence from the United States," Energy Policy, Elsevier, vol. 62(C), pages 1434-1437.
    11. Vona, Francesco & Patriarca, Fabrizio, 2011. "Income inequality and the development of environmental technologies," Ecological Economics, Elsevier, vol. 70(11), pages 2201-2213, September.
    12. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    13. Jiekuan Zhang & Yan Zhang, 2021. "The relationship between China's income inequality and transport infrastructure, economic growth, and carbon emissions," Growth and Change, Wiley Blackwell, vol. 52(1), pages 243-264, March.
    14. Abay Mulatu, 2017. "The Structure of UK Outbound FDI and Environmental Regulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(1), pages 65-96, September.
    15. Zhou, Mengling & Wang, Bing & Chen, Zhongfei, 2020. "Has the anti-corruption campaign decreased air pollution in China?," Energy Economics, Elsevier, vol. 91(C).
    16. repec:cdl:ucsbec:28-98 is not listed on IDEAS
    17. Yuquing Xing & Charles Kolstad, 2002. "Do Lax Environmental Regulations Attract Foreign Investment?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 1-22, January.
    18. Blackburn, Keith & Forgues-Puccio, Gonzalo F., 2007. "Distribution and development in a model of misgovernance," European Economic Review, Elsevier, vol. 51(6), pages 1534-1563, August.
    19. Jie He & Paul MAKDISSI & Quentin WODON, 2007. "Corruption, Inequality, and Environmental Regulation," Cahiers de recherche 07-13, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    20. Chong, Alberto & Calderon, Cesar, 2000. "Institutional Quality and Income Distribution," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 761-786, July.
    21. Lutao Ning & Fan Wang, 2018. "Does FDI Bring Environmental Knowledge Spillovers to Developing Countries? The Role of the Local Industrial Structure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 381-405, October.
    22. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
    23. James Boyce, 1994. "Inequality as a Cause of Environmental Degradation," Published Studies ps1, Political Economy Research Institute, University of Massachusetts at Amherst.
    24. Fredriksson, Per G. & Svensson, Jakob, 2003. "Political instability, corruption and policy formation: the case of environmental policy," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1383-1405, August.
    25. Torras, Mariano & Boyce, James K., 1998. "Income, inequality, and pollution: a reassessment of the environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 25(2), pages 147-160, May.
    26. Baomin Dong & Jiong Gong & Xin Zhao, 2012. "FDI and environmental regulation: pollution haven or a race to the top?," Journal of Regulatory Economics, Springer, vol. 41(2), pages 216-237, April.
    27. Clas Eriksson & Joakim Persson, 2013. "Democracy, income and pollution," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(3), pages 291-308, July.
    28. Gustafsson, Björn & LI, Shi & Sato, Hiroshi, 2014. "Data for studying earnings, the distribution of household income and poverty in China," China Economic Review, Elsevier, vol. 30(C), pages 419-431.
    29. Rojas-Vallejos, Jorge & Lastuka, Amy, 2020. "The income inequality and carbon emissions trade-off revisited," Energy Policy, Elsevier, vol. 139(C).
    30. Cole, Matthew A. & Fredriksson, Per G., 2009. "Institutionalized pollution havens," Ecological Economics, Elsevier, vol. 68(4), pages 1239-1256, February.
    31. Chung, Sunghoon, 2014. "Environmental regulation and foreign direct investment: Evidence from South Korea," Journal of Development Economics, Elsevier, vol. 108(C), pages 222-236.
    32. Zhijun Feng & Wei Chen, 2018. "Environmental Regulation, Green Innovation, and Industrial Green Development: An Empirical Analysis Based on the Spatial Durbin Model," Sustainability, MDPI, vol. 10(1), pages 1-22, January.
    33. Zhonghua Cheng & Lianshui Li & Jun Liu, 2018. "The spatial correlation and interaction between environmental regulation and foreign direct investment," Journal of Regulatory Economics, Springer, vol. 54(2), pages 124-146, October.
    34. Paulina Oliva, 2015. "Environmental Regulations and Corruption: Automobile Emissions in Mexico City," Journal of Political Economy, University of Chicago Press, vol. 123(3), pages 686-724.
    35. Hübler, Michael, 2017. "The inequality-emissions nexus in the context of trade and development: A quantile regression approach," Ecological Economics, Elsevier, vol. 134(C), pages 174-185.
    36. Xie, Rong-hui & Yuan, Yi-jun & Huang, Jing-jing, 2017. "Different Types of Environmental Regulations and Heterogeneous Influence on “Green” Productivity: Evidence from China," Ecological Economics, Elsevier, vol. 132(C), pages 104-112.
    37. Hongbin Cai & Hanming Fang & Lixin Colin Xu, 2011. "Eat, Drink, Firms, Government: An Investigation of Corruption from the Entertainment and Travel Costs of Chinese Firms," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 55-78.
    38. Sourav Batabyal & Abdur Chowdhury, 2015. "Curbing corruption, financial development and income inequality," Progress in Development Studies, , vol. 15(1), pages 49-72, January.
    39. Xiaohui Wu & Ren He & Meiling He, 2021. "Chaos Analysis of Urban Low-Carbon Traffic Based on Game Theory," IJERPH, MDPI, vol. 18(5), pages 1-12, February.
    40. Liu, Qianqian & Wang, Shaojian & Zhang, Wenzhong & Li, Jiaming & Kong, Yunlong, 2019. "Examining the effects of income inequality on CO2 emissions: Evidence from non-spatial and spatial perspectives," Applied Energy, Elsevier, vol. 236(C), pages 163-171.
    41. Boyce, James K., 1994. "Inequality as a cause of environmental degradation," Ecological Economics, Elsevier, vol. 11(3), pages 169-178, December.
    42. Grunewald, Nicole & Klasen, Stephan & Martínez-Zarzoso, Inmaculada & Muris, Chris, 2017. "The Trade-off Between Income Inequality and Carbon Dioxide Emissions," Ecological Economics, Elsevier, vol. 142(C), pages 249-256.
    43. Li,Shi & Sato,Hiroshi & Sicular,Terry (ed.), 2013. "Rising Inequality in China," Cambridge Books, Cambridge University Press, number 9781107002913.
    44. Shi Wang & Yizhou Yuan & Hua Wang, 2019. "Corruption, Hidden Economy and Environmental Pollution: A Spatial Econometric Analysis Based on China’s Provincial Panel Data," IJERPH, MDPI, vol. 16(16), pages 1-23, August.
    45. Mr. Vito Tanzi, 1995. "Government Role and the Efficiency of Policy Instruments," IMF Working Papers 1995/100, International Monetary Fund.
    46. Saman Attiq & Ka Yin Chau & Shahid Bashir & Muhammad Danish Habib & Rauf I. Azam & Wing-Keung Wong, 2021. "Sustainability of Household Food Waste Reduction: A Fresh Insight on Youth’s Emotional and Cognitive Behaviors," IJERPH, MDPI, vol. 18(13), pages 1-23, June.
    47. Apergis, Nicholas, 2016. "Environmental Kuznets curves: New evidence on both panel and country-level CO2 emissions," Energy Economics, Elsevier, vol. 54(C), pages 263-271.
    48. Zhenhua Zhang & Guoxing Zhang & Shunfeng Song & Bin Su, 2020. "Spatial Heterogeneity Influences of Environmental Control and Informal Regulation on Air Pollutant Emissions in China," IJERPH, MDPI, vol. 17(13), pages 1-22, July.
    49. Ravallion, Martin & Heil, Mark & Jalan, Jyotsna, 2000. "Carbon Emissions and Income Inequality," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 651-669, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wing-Keung Wong, 2022. "Editorial Statement and Research Ideas on Using Behavioral Models in Environmental Research and Public Health with Applications," IJERPH, MDPI, vol. 19(12), pages 1-3, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wan, Guanghua & Wang, Chen & Wang, Jinxian & Zhang, Xun, 2022. "The income inequality-CO2 emissions nexus: Transmission mechanisms," Ecological Economics, Elsevier, vol. 195(C).
    2. Abebe Hailemariam & Ratbek Dzhumashev & Muhammad Shahbaz, 2020. "Carbon emissions, income inequality and economic development," Empirical Economics, Springer, vol. 59(3), pages 1139-1159, September.
    3. Salih Ozturk & Murat Cetin & Harun Demir, 2022. "Income inequality and CO2 emissions: nonlinear evidence from Turkey," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(10), pages 11911-11928, October.
    4. Nicolli, Francesco & Gilli, Marianna & Vona, Francesco, 2022. "Inequality and Climate Change: Two Problems, One Solution?," FEEM Working Papers 329340, Fondazione Eni Enrico Mattei (FEEM).
    5. Bo Yang & Minhaj Ali & Shujahat Haider Hashmi & Mohsin Shabir, 2020. "Income Inequality and CO 2 Emissions in Developing Countries: The Moderating Role of Financial Instability," Sustainability, MDPI, vol. 12(17), pages 1-24, August.
    6. Fateh Belaïd, Sabri Boubaker, Rajwane Kafrouni, 2020. "Carbon emissions, income inequality and environmental degradation: the case of Mediterranean countries," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 17(1), pages 73-102, June.
    7. Baoxi Li & De Xiao, 2021. "The Impact of Income Inequality on Subjective Environmental Pollution: Individual Evidence from China," IJERPH, MDPI, vol. 18(15), pages 1-26, July.
    8. Uddin, Md. Main & Mishra, Vinod & Smyth, Russell, 2020. "Income inequality and CO2 emissions in the G7, 1870–2014: Evidence from non-parametric modelling," Energy Economics, Elsevier, vol. 88(C).
    9. Andersson, Fredrik N.G., 2023. "Income inequality and carbon emissions in the United States 1929–2019," Ecological Economics, Elsevier, vol. 204(PA).
    10. Usman Mehmood & Ephraim Bonah Agyekum & Salman Tariq & Zia Ul Haq & Solomon Eghosa Uhunamure & Joshua Nosa Edokpayi & Ayesha Azhar, 2022. "Socio-Economic Drivers of Renewable Energy: Empirical Evidence from BRICS," IJERPH, MDPI, vol. 19(8), pages 1-10, April.
    11. Lesly Cassin & Paolo Melindi-Ghidi & Fabien Prieur, 2021. "The impact of income inequality on public environmental expenditure with green consumerism," Working Papers 2021.08, FAERE - French Association of Environmental and Resource Economists.
    12. Zhang, Chuanguo & Zhao, Wei, 2014. "Panel estimation for income inequality and CO2 emissions: A regional analysis in China," Applied Energy, Elsevier, vol. 136(C), pages 382-392.
    13. Recep Ulucak & Danish & Yaoqi Zhang & Rui Chen & Yiting Qiu, 2024. "Income Inequality, Economic Complexity, and Renewable Energy Impacts in Controlling Consumption-Based Carbon Emissions," Evaluation Review, , vol. 48(1), pages 119-142, February.
    14. Asongu, Simplice & Odhiambo, Nicholas, 2020. "Inequality and Renewable Energy Consumption in Sub-Saharan Africa: Implication for High Income Countries," MPRA Paper 107539, University Library of Munich, Germany.
    15. Nicholas Marinucci & Kris Ivanovski, 2023. "Does Inequality Affect Climate Change? A Regional and Sectoral Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 166(3), pages 705-729, April.
    16. Kopp, Thomas & Nabernegg, Markus, 2022. "Inequality and Environmental Impact – Can the Two Be Reduced Jointly?," Ecological Economics, Elsevier, vol. 201(C).
    17. Ibrahim Mohamed Ali Ali, 2023. "Income Inequality and Environmental Degradation in Middle-Income Countries: A Test of Two Competing Hypotheses," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 166(2), pages 299-321, April.
    18. Sylwia Bialek & Alfons J. Weichenrieder, 2021. "Do Stringent Environmental Policies Deter FDI? M&A versus Greenfield," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(3), pages 603-636, November.
    19. Yulin Liu & Min Zhang & Rujia Liu, 2020. "The Impact of Income Inequality on Carbon Emissions in China: A Household-Level Analysis," Sustainability, MDPI, vol. 12(7), pages 1-22, March.
    20. Feng Wang & Jian Yang & Joshua Shackman & Xin Liu, 2021. "Impact of Income Inequality on Urban Air Quality: A Game Theoretical and Empirical Study in China," IJERPH, MDPI, vol. 18(16), pages 1-17, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:18:y:2021:i:15:p:8050-:d:604479. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.