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How does economic growth targets influence vegetation dynamics? Evidence from China

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  • Yan, Siqi
  • Wang, Jian
  • Wu, Qun

Abstract

Setting economic growth targets (EGTs) is an essential tool for governments worldwide to implement macroeconomic management, and its significant environmental impacts is commonly accepted. However, research on EGTs’ influence on vegetation dynamics remains limited. Using fixed effects modeling and instrumental variable techniques, this study analyzes EGTs’ impact on vegetation conditions and underlying mechanisms in 286 Chinese cities (2011–2022). Fiscal pressure-dependent nonlinearities in the effect of EGTs on vegetation status is examined through panel threshold modeling. Results show that EGTs negatively affects vegetation status. EGTs’ adverse impact upon vegetation conditions is stronger in resource-based or secondary industry-led cities. Mechanism analysis reveals that EGTs unfavorably influences vegetation status through fostering urban expansion and driving local governments to lessen intensity of environmental regulation. Threshold effect analysis indicates that as local fiscal pressure increases, disadvantageous impact of EGTs on vegetation conditions tends to be more intense. This study provides important theoretical insights into institutional determinants of vegetation dynamics, and has significant policy implications for optimizing management of EGTs and promoting vegetation conservation.

Suggested Citation

  • Yan, Siqi & Wang, Jian & Wu, Qun, 2025. "How does economic growth targets influence vegetation dynamics? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1476-1491.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:1476-1491
    DOI: 10.1016/j.eap.2025.05.010
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    Keywords

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    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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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