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The empirical relationship between openness and environmental pollution in China

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  • Ning Chang

Abstract

By using a vector autoregression (VAR) model, this paper examines the relationship between openness and environmental degradation in China. The empirical results suggest that, during 1981--2008, the long-run equilibrium relation between China's foreign trade, foreign direct investment (FDI) and industrial pollutants can be positive or negative, depending on the pollutants concerned. Therefore it is hard to say whether openness is good or bad for the environment in China. Moreover, a short-run causality test reveals that China's exports expansion leads to an increase in sulphur dioxide (SO 2 ) emissions, while imports and FDI enlargement result in the growth of solid waste generation. On the other hand, China's control of SO 2 emissions discourages its exports, whereas control of wastewater discharge encourages its imports.

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  • Ning Chang, 2012. "The empirical relationship between openness and environmental pollution in China," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(6), pages 783-796, August.
    • Handle: RePEc:taf:jenpmg:v:55:y:2012:i:6:p:783-796
    DOI: 10.1080/09640568.2011.628087
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    1. Dean, Judith M. & Lovely, Mary E. & Wang, Hua, 2004. "Foreign Direct Investment and Pollution Havens: Evaluating the Evidence from China," Working Papers 15854, United States International Trade Commission, Office of Economics.
    2. Umed Temurshoev, 2006. "Pollution Haven Hypothesis or Factor Endowment Hypothesis: Theory and Empirical Examination for the US and China," CERGE-EI Working Papers wp292, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
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    4. Dinda, Soumyananda, 2006. "Globalization and Environment: Can Pollution Haven Hypothesis alone explain the impact of Globalization on Environment?," MPRA Paper 59111, University Library of Munich, Germany, revised 15 Oct 2006.
    5. Olivier Blanchard & Roberto Perotti, 2002. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1329-1368.
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    Cited by:

    1. Jian Xue & Zeeshan Rasool & Raima Nazar & Ahmad Imran Khan & Shaukat Hussain Bhatti & Sajid Ali, 2021. "Revisiting Natural Resources—Globalization-Environmental Quality Nexus: Fresh Insights from South Asian Countries," Sustainability, MDPI, vol. 13(8), pages 1-19, April.
    2. Shahbaz, Muhammad & Mallick, Hrushikesh & Kumar, Mantu & Loganathan, Nanthakumar, 2015. "Does Globalization Impede Environmental Quality in India?," MPRA Paper 67285, University Library of Munich, Germany, revised 15 Oct 2015.
    3. Hanen Ragoubi & Zouheir Mighri, 2021. "Spillover effects of trade openness on CO2 emissions in middle‐income countries: A spatial panel data approach," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 835-877, June.
    4. Sharma, Rajesh & Sinha, Avik & Kautish, Pradeep, 2021. "Do economic endeavors complement sustainability goals in the emerging economies of South and Southeast Asia?," MPRA Paper 108163, University Library of Munich, Germany, revised 2021.
    5. Antoci, Angelo & Ragni, Stefania & Russu, Paolo, 2016. "Optimal dynamics in a two-sector model with natural resources and foreign direct investments," Applied Mathematics and Computation, Elsevier, vol. 273(C), pages 290-307.
    6. Shahbaz, Muhammad, 2019. "Globalization-Emissions Nexus: Testing the EKC hypothesis in Next-11 Countries," MPRA Paper 93959, University Library of Munich, Germany, revised 13 May 2019.
    7. Shahbaz, Muhammad & Kumar Mahalik, Mantu & Jawad Hussain Shahzad, Syed & Hammoudeh, Shawkat, 2019. "Testing the globalization-driven carbon emissions hypothesis: International evidence," International Economics, Elsevier, vol. 158(C), pages 25-38.
    8. Angelo Antoci & Paolo Russu & Elisa Ticci, 2011. "Investement inflows and sustainable development in a natural resource-dependent economy," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 0311, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
    9. Mutascu, Mihai, 2018. "A time-frequency analysis of trade openness and CO2 emissions in France," Energy Policy, Elsevier, vol. 115(C), pages 443-455.
    10. Gao Ling & Asif Razzaq & Yaqiong Guo & Tehreem Fatima & Farrukh Shahzad, 2022. "Asymmetric and time-varying linkages between carbon emissions, globalization, natural resources and financial development in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6702-6730, May.
    11. Sujan Chandra Paul & Md. Harun Or Rosid & Md. Jamil Sharif & Anjuman Ara Rajonee, 2021. "Foreign Direct Investment and CO2, CH4, N2O, Greenhouse Gas Emissions: A Cross Country Study," International Journal of Economics and Financial Issues, Econjournals, vol. 11(4), pages 97-104.
    12. Muhammad Shahbaz, 2022. "Globalization–Emissions Nexus: Testing the EKC Hypothesis in Next-11 Countries," Global Business Review, International Management Institute, vol. 23(1), pages 75-100, February.
    13. Lu, Zhou & Mahalik, Mantu Kumar & Mahalik, Hrushikesh & Zhao, Rui, 2022. "The moderating effects of democracy and technology adoption on the relationship between trade liberalisation and carbon emissions," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    14. Wen Jun & Muhammad Zakaria & Syed Jawad Hussain Shahzad & Hamid Mahmood, 2018. "Effect of FDI on Pollution in China: New Insights Based on Wavelet Approach," Sustainability, MDPI, vol. 10(11), pages 1-20, October.
    15. Shahbaz, Muhammad & Syed, Jawad & Kumar, Mantu & Hammoudeh, Shawkat, 2017. "Does globalization worsen environmental quality in developed economies?," MPRA Paper 80055, University Library of Munich, Germany, revised 06 Jul 2017.

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