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Economic growth and the environment in China: an empirical analysis of productivity


  • Shunsuke Managi
  • Shinji Kaneko


China is an economic powerhouse with annual economic growth averaging close to 9% over the last 25 years. However, as a result of this extremely rapid economic growth, the scale and seriousness of its environmental problems are clearly evident. Consequently, a number of environmental problems, including growing energy consumption, heavy reliance on coal and increasing air pollution are threatening China's sustainable future. The principal focus of this paper is to measure total factor productivity within a joint-production model that considers both market and environmental pollution variables and employs unique province-level secondary industry data over the period 1992–2003. The results indicate that although China began implementing new environmental policies in the late 1970s, and although the stringency of these regulations is increasing, there is no short-term positive benefit associated with their implementation. However, some environmental productivity measures, such as wastewater treatment, have exhibited an increase in managerial efficiency.

Suggested Citation

  • Shunsuke Managi & Shinji Kaneko, 2006. "Economic growth and the environment in China: an empirical analysis of productivity," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 6(1), pages 89-133.
  • Handle: RePEc:ids:ijgenv:v:6:y:2006:i:1:p:89-133

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    Cited by:

    1. Xinfei Li & Baodong Cheng & Qiling Hong & Chang Xu, 2021. "Can a Win–Win Situation of Economy and Environment Be Achieved in Cities by the Government’s Environmental Regulations?," Sustainability, MDPI, vol. 13(11), pages 1-20, May.
    2. Halkos, George & Polemis, Michael, 2016. "Examining the impact of financial development on the environmental Kuznets curve hypothesis," MPRA Paper 75368, University Library of Munich, Germany.
    3. Jinnan Wu & Nianxin Wang & Zhining Wang, 2017. "Impact of information technology capability on financial performance during the period of economic downturn: the case of Chinese listed companies," Electronic Commerce Research, Springer, vol. 17(3), pages 403-423, September.
    4. Jayanthakumaran, Kankesu & Liu, Ying, 2012. "Openness and the Environmental Kuznets Curve: Evidence from China," Economic Modelling, Elsevier, vol. 29(3), pages 566-576.
    5. Xinfei Li & Chang Xu & Baodong Cheng & Jingyang Duan & Yueming Li, 2021. "Does Environmental Regulation Improve the Green Total Factor Productivity of Chinese Cities? A Threshold Effect Analysis Based on the Economic Development Level," IJERPH, MDPI, vol. 18(9), pages 1-21, April.
    6. Masayuki Shimizu, 2022. "Effects of pollution abatement activities on environmental efficiency and productivity: Empirical evidence from the Chinese industrial sector," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 484-509, February.
    7. Pinyi Su & Muhammad Imran & Muhammad Nadeem & Shamsheer ul Haq, 2023. "The Role of Environmental Law in Farmers’ Environment-Protecting Intentions and Behavior Based on Their Legal Cognition: A Case Study of Jiangxi Province, China," Sustainability, MDPI, vol. 15(11), pages 1-22, May.
    8. Halkos, George & Managi, Shunsuke & Tsilika, Kyriaki, 2017. "Evaluating a continent-wise situation for capital data," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 57-74.
    9. Wang, Li & Shao, Yuhui & Sun, Youxia & Wang, Yanan, 2023. "Rent-seeking, promotion pressure and green economic efficiency: Evidence from China," Economic Systems, Elsevier, vol. 47(1).
    10. George E. Halkos & Michael L. Polemis, 2017. "Does Financial Development Affect Environmental Degradation? Evidence from the OECD Countries," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1162-1180, December.
    11. Huynh, Cong Minh & Le, Quoc Nha & Lam, Thi Huong Tra, 2023. "Is air pollution a government failure or a market failure? Global evidence from a multi-dimensional analysis," Energy Policy, Elsevier, vol. 173(C).
    12. Yang, Fuxia & Yang, Mian & Nie, Hualin, 2013. "Productivity trends of Chinese regions: A perspective from energy saving and environmental regulations," Applied Energy, Elsevier, vol. 110(C), pages 82-89.
    13. Ruoyu Yang & Weidong Chen, 2019. "Spatial Correlation, Influencing Factors and Environmental Supervision on Mechanism Construction of Atmospheric Pollution: An Empirical Study on SO 2 Emissions in China," Sustainability, MDPI, vol. 11(6), pages 1-13, March.
    14. Na Zhou & Jinkai Zhao & Kai Zhao & Dong Li, 2021. "Analysis on the Sources of China’s Economic Growth From the Perspective of Cleaner Production," SAGE Open, , vol. 11(2), pages 21582440219, April.
    15. Han Bao & Tangwei Teng & Xianzhong Cao & Shengpeng Wang & Senlin Hu, 2022. "The Threshold Effect of Knowledge Diversity on Urban Green Innovation Efficiency Using the Yangtze River Delta Region as an Example," IJERPH, MDPI, vol. 19(17), pages 1-18, August.
    16. Tomas Balezentis & Kristiaan Kerstens & Zhiyang Shen, 2022. "Economic and Environmental Decomposition of Luenberger-Hicks-Moorsteen Total Factor Productivity Indicator: Empirical Analysis of Chinese Textile Firms With a Focus on Reporting Infeasibilities and Qu," Post-Print hal-03833245, HAL.
    17. Wanping Yang & Jinkai Zhao, 2018. "Study On China’S Economic Development From The Perspective Of Strong Sustainability," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(01), pages 161-192, April.
    18. Wenqin Yan & Dongsheng Yan, 2023. "The Regional Effect of Land Transfer on Green Total Factor Productivity in the Yangtze River Delta: A Spatial Econometric Investigation," Land, MDPI, vol. 12(9), pages 1-18, September.
    19. Fan, Meiting & Shao, Shuai & Yang, Lili, 2015. "Combining global Malmquist–Luenberger index and generalized method of moments to investigate industrial total factor CO2 emission performance: A case of Shanghai (China)," Energy Policy, Elsevier, vol. 79(C), pages 189-201.
    20. Liu, Guangtian & Wang, Bing & Zhang, Ning, 2016. "A coin has two sides: Which one is driving China’s green TFP growth?," Economic Systems, Elsevier, vol. 40(3), pages 481-498.
    21. Kai Xu & Guangdong Tian, 2022. "Codification and Prospect of China’s Codification of Environmental Law from the Perspective of Global Environmental Governance," IJERPH, MDPI, vol. 19(16), pages 1-14, August.
    22. Miao, Zhuang & Baležentis, Tomas & Shao, Shuai & Chang, Dongfeng, 2019. "Energy use, industrial soot and vehicle exhaust pollution—China's regional air pollution recognition, performance decomposition and governance," Energy Economics, Elsevier, vol. 83(C), pages 501-514.


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