IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v8y2011i7p2937-2950d13176.html
   My bibliography  Save this article

Assessment of the Interactions between Economic Growth and Industrial Wastewater Discharges Using Co-integration Analysis: A Case Study for China’s Hunan Province

Author

Listed:
  • Qiang Xiao

    (Chongqing University of Arts and Sciences, Chongqing 402160, China
    State Key Laboratory of Urban and Regional Ecology, Center for Eco-Environmental Sciences, Chinese Academy of Sciences, Beijing 100085, China)

  • Yang Gao

    (Key Laboratory of Water Cycle and Related Land Surface Processes, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing 100101, China)

  • Dan Hu

    (State Key Laboratory of Urban and Regional Ecology, Center for Eco-Environmental Sciences, Chinese Academy of Sciences, Beijing 100085, China)

  • Hong Tan

    (Chongqing University of Arts and Sciences, Chongqing 402160, China)

  • Tianxiang Wang

    (Chongqing University of Arts and Sciences, Chongqing 402160, China)

Abstract

We have investigated the interactions between economic growth and industrial wastewater discharge from 1978 to 2007 in China's Hunan Province using co-integration theory and an error-correction model. Two main economic growth indicators and four representative industrial wastewater pollutants were selected to demonstrate the interaction mechanism. We found a long-term equilibrium relationship between economic growth and the discharge of industrial pollutants in wastewater between 1978 and 2007 in Hunan Province. The error-correction mechanism prevented the variable expansion for long-term relationship at quantity and scale, and the size of the error-correction parameters reflected short-term adjustments that deviate from the long-term equilibrium. When economic growth changes within a short term, the discharge of pollutants will constrain growth because the values of the parameters in the short-term equation are smaller than those in the long-term co-integrated regression equation, indicating that a remarkable long-term influence of economic growth on the discharge of industrial wastewater pollutants and that increasing pollutant discharge constrained economic growth. Economic growth is the main driving factor that affects the discharge of industrial wastewater pollutants in Hunan Province. On the other hand, the discharge constrains economic growth by producing external pressure on growth, although this feedback mechanism has a lag effect. Economic growth plays an important role in explaining the predicted decomposition of the variance in the discharge of industrial wastewater pollutants, but this discharge contributes less to predictions of the variations in economic growth.

Suggested Citation

  • Qiang Xiao & Yang Gao & Dan Hu & Hong Tan & Tianxiang Wang, 2011. "Assessment of the Interactions between Economic Growth and Industrial Wastewater Discharges Using Co-integration Analysis: A Case Study for China’s Hunan Province," IJERPH, MDPI, vol. 8(7), pages 1-14, July.
    • Handle: RePEc:gam:jijerp:v:8:y:2011:i:7:p:2937-2950:d:13176
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/8/7/2937/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/8/7/2937/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wagner, Martin, 2008. "The carbon Kuznets curve: A cloudy picture emitted by bad econometrics?," Resource and Energy Economics, Elsevier, vol. 30(3), pages 388-408, August.
    2. B. T. Ewing & M. J. Piette & J. E. Payne, 2004. "Correction," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 71(3), pages 557-557, September.
    3. Apergis, Nicholas & Payne, James E., 2009. "Energy consumption and economic growth in Central America: Evidence from a panel cointegration and error correction model," Energy Economics, Elsevier, vol. 31(2), pages 211-216.
    4. Stein, Sheldon H. & Song, Frank M., 2002. "Vector autoregression and the dynamic multiplier: a historical review," Journal of Policy Modeling, Elsevier, vol. 24(3), pages 283-300, June.
    5. Lee, Chien-Chiang & Chang, Chun-Ping, 2007. "Energy consumption and GDP revisited: A panel analysis of developed and developing countries," Energy Economics, Elsevier, vol. 29(6), pages 1206-1223, November.
    6. Us, Vuslat, 2004. "Inflation dynamics and monetary policy strategy: some prospects for the Turkish economy," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 1003-1013, December.
    7. Bekiros, Stelios D. & Diks, Cees G.H., 2008. "The relationship between crude oil spot and futures prices: Cointegration, linear and nonlinear causality," Energy Economics, Elsevier, vol. 30(5), pages 2673-2685, September.
    8. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 353-377.
    9. Lastrapes, William D., 2005. "Estimating and identifying vector autoregressions under diagonality and block exogeneity restrictions," Economics Letters, Elsevier, vol. 87(1), pages 75-81, April.
    10. 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.
    11. Tillmann, Peter, 2004. "External shocks and the non-linear dynamics of Brady bond spreads in a regime-switching VAR," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 14(5), pages 439-454, December.
    12. Coondoo, Dipankor & Dinda, Soumyananda, 2002. "Causality between income and emission: a country group-specific econometric analysis," Ecological Economics, Elsevier, vol. 40(3), pages 351-367, March.
    13. Nanang, David M., 2000. "A multivariate cointegration test of the law of one price for Canadian softwood lumber markets," Forest Policy and Economics, Elsevier, vol. 1(3-4), pages 347-355, December.
    14. Grewal, Rajdeep & Mills, Jeffrey A. & Mehta, Raj & Mujumdar, Sudesh, 2001. "Using cointegration analysis for modeling marketing interactions in dynamic environments: methodological issues and an empirical illustration," Journal of Business Research, Elsevier, vol. 51(2), pages 127-144, February.
    15. Maki, Daiki, 2003. "Nonparametric cointegration analysis of the nominal interest rate and expected inflation rate," Economics Letters, Elsevier, vol. 81(3), pages 349-354, December.
    16. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    17. Soytas, Ugur & Sari, Ramazan & Ewing, Bradley T., 2007. "Energy consumption, income, and carbon emissions in the United States," Ecological Economics, Elsevier, vol. 62(3-4), pages 482-489, May.
    18. Lucchetti, Riccardo & Palomba, Giulio, 2009. "Nonlinear adjustment in US bond yields: An empirical model with conditional heteroskedasticity," Economic Modelling, Elsevier, vol. 26(3), pages 659-667, May.
    19. Conrad, Christian & Karanasos, Menelaos, 2006. "The impulse response function of the long memory GARCH process," Economics Letters, Elsevier, vol. 90(1), pages 34-41, January.
    20. Ramirez, Miguel D., 2006. "Is foreign direct investment beneficial for Mexico? An empirical analysis, 1960-2001," World Development, Elsevier, vol. 34(5), pages 802-817, May.
    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. Jibo Chen & Keyao Chen & Guizhi Wang & Lingyan Wu & Xiaodong Liu & Guo Wei, 2019. "PM 2.5 Pollution and Inhibitory Effects on Industry Development: A Bidirectional Correlation Effect Mechanism," IJERPH, MDPI, vol. 16(7), pages 1-21, March.

    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. Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Roubaud, David & Farhani, Sahbi, 2018. "How economic growth, renewable electricity and natural resources contribute to CO2 emissions?," Energy Policy, Elsevier, vol. 113(C), pages 356-367.
    2. Bella, Giovanni & Massidda, Carla & Mattana, Paolo, 2014. "The relationship among CO2 emissions, electricity power consumption and GDP in OECD countries," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 970-985.
    3. Tiba, Sofien & Omri, Anis, 2017. "Literature survey on the relationships between energy, environment and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1129-1146.
    4. Kais, Saidi & Sami, Hammami, 2016. "An econometric study of the impact of economic growth and energy use on carbon emissions: Panel data evidence from fifty eight countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1101-1110.
    5. Acheampong, Alex O., 2018. "Economic growth, CO2 emissions and energy consumption: What causes what and where?," Energy Economics, Elsevier, vol. 74(C), pages 677-692.
    6. Sun, Huaping & Samuel, Clottey Attuquaye & Kofi Amissah, Joshua Clifford & Taghizadeh-Hesary, Farhad & Mensah, Isaac Adjei, 2020. "Non-linear nexus between CO2 emissions and economic growth: A comparison of OECD and B&R countries," Energy, Elsevier, vol. 212(C).
    7. Lean, Hooi Hooi & Smyth, Russell, 2010. "CO2 emissions, electricity consumption and output in ASEAN," Applied Energy, Elsevier, vol. 87(6), pages 1858-1864, June.
    8. Onafowora, Olugbenga A. & Owoye, Oluwole, 2014. "Bounds testing approach to analysis of the environment Kuznets curve hypothesis," Energy Economics, Elsevier, vol. 44(C), pages 47-62.
    9. Onater-Isberk, Esra, 2016. "Environmental Kuznets curve under noncarbohydrate energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 338-347.
    10. Sinha, Avik & Bhattacharya, Joysankar, 2017. "Estimation of environmental Kuznets curve for SO2 emission: A case of Indian cities," MPRA Paper 100009, University Library of Munich, Germany.
    11. Apergis, Nicholas & Payne, James E., 2010. "Coal consumption and economic growth: Evidence from a panel of OECD countries," Energy Policy, Elsevier, vol. 38(3), pages 1353-1359, March.
    12. Alvarez-Herranz, Agustin & Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Cantos, José María, 2017. "Energy innovation and renewable energy consumption in the correction of air pollution levels," Energy Policy, Elsevier, vol. 105(C), pages 386-397.
    13. Soumyananda Dinda, 2018. "Production technology and carbon emission: long-run relation with short-run dynamics," Journal of Applied Economics, Taylor & Francis Journals, vol. 21(1), pages 106-121, January.
    14. Valeria Costantini & Chiara Martini, 2010. "A Modified Environmental Kuznets Curve for sustainable development assessment using panel data," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 10(1/2), pages 84-122.
    15. Sofien, Tiba & Omri, Anis, 2016. "Literature survey on the relationships between energy variables, environment and economic growth," MPRA Paper 82555, University Library of Munich, Germany, revised 14 Sep 2016.
    16. Buhari DOĞAN & Osman DEĞER, 2018. "The role of economic growth and energy consumption on CO2 emissions in E7 countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(615), S), pages 231-246, Summer.
    17. De Juan Fernández, Aránzazu & Poncela, Pilar & Rodríguez Caballero, Carlos Vladimir & Ruiz Ortega, Esther, 2022. "Economic activity and climate change," DES - Working Papers. Statistics and Econometrics. WS 35044, Universidad Carlos III de Madrid. Departamento de Estadística.
    18. Duc Khuong Nguyen & Benoît Sévi & Bo Sjö & Gazi Salah Uddin, 2017. "The role of trade openness and investment in examining the energy-growth-pollution nexus: empirical evidence for China and India," Applied Economics, Taylor & Francis Journals, vol. 49(40), pages 4083-4098, August.
    19. Muhammad Zeshan & Vaqar Ahmed, 2013. "Energy, environment and growth nexus in South Asia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(6), pages 1465-1475, December.
    20. Guglielmo Maria Caporale & Gloria Claudio-Quiroga & Luis A. Gil-Alana, 2019. "CO2 Emissions and GDP: Evidence from China," CESifo Working Paper Series 7881, CESifo.

    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:8:y:2011:i:7:p:2937-2950:d:13176. 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.