ECONOMIC GROWTH, AIR POLLUTION, AND GOVERNMENT ENVIRONMENTAL REGULATION: EVIDENCE FROM 287 PREFECTURE-LEVEL CITIES IN CHINA

Abstract

Air pollution control is crucial for promoting the modernization of governance systems and efficiency. To address the subjective contrived factors and errors in the gross domestic product (GDP) data in traditional statistical almanacs, our study aims to construct a panel data model of 287 prefecture-level cities for the period from 1998–2016 (using objective nighttime light data). We also used government work report words related to environmental regulation to characterize the constraints of government environmental regulations. For this purpose, we used instrumental variables (to explore the relationship and interaction between air pollution and economic growth) and a model setting, with which we carried out regression analysis and robustness tests; the findings were validated using a transmission mechanism hypothesis. We found that that economic growth and air pollution positively influence each other and government environmental regulations significantly reduce air pollution. We also found that to achieve high economic development, environmental pollution must be controlled to avoid further damage to human and material capital. Furthermore, government environmental regulations can help improve the environmental comfort level and economic development quality.