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Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

Author

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  • Ayoub Zeraibi

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China)

  • Daniel Balsalobre-Lorente

    (Department of Political Economy and Public Finance, Economic and Business Statistics and Economic Policy, University of Castilla-La Mancha, 13001 Ciudad Real, Spain)

  • Khurram Shehzad

    (School of Economics and Management, Southeast University, Nanjing 211189, China)

Abstract

With rapid economic growth, the Chinese government expenditures at various levels have increased adequately. At the same time, the environmental quality in China has deteriorated significantly. In this study, provincial-level data for 31 Chinese provinces during 2007–2017 are used to investigate the impacts of government expenditure on the emissions of three specific measures of environmental degradation. The main objective of this study is to examine the influence of government expenditures, economic growth per capita, environment protection expenditure, and added second-sector value on environmental quality by measuring sulfur dioxide (SO 2 ), chemical oxygen demand (COD), and ammonia nitrogen emissions (AN). Moreover, the study applied the generalized method of moments (GMM) and the fully modified least square (FMOLS) to estimate the co-integration relationship among the underlying factors. The results demonstrate a significant direct effect of government expenditure on improving environmental quality overall in the Chinese provinces, which increases with the level of economic growth. However, the results also confirmed the inverted N-shaped relationship between the pollution factor and economic growth per capita. Our key findings lead toward the manifestation and emphasis of the importance of appropriate policies for restoring government expenditure and, at the same time, strengthening the relationship between the industrial sector and environmental policy standards. Significantly, governments in developing countries should allocate larger budgets for environmental projects in their fiscal reforms for the sake of moving to greener and more inclusive economies with low-carbon activities.

Suggested Citation

  • Ayoub Zeraibi & Daniel Balsalobre-Lorente & Khurram Shehzad, 2021. "Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality," IJERPH, MDPI, vol. 18(18), pages 1-16, September.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:18:p:9667-:d:635080
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    Cited by:

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    4. Shunbin Zhong & Huafu Shen & Ziheng Niu & Yang Yu & Lin Pan & Yaojun Fan & Atif Jahanger, 2022. "Moving towards Environmental Sustainability: Can Digital Economy Reduce Environmental Degradation in China?," IJERPH, MDPI, vol. 19(23), pages 1-23, November.
    5. Muhammad Arif & Zhang Chenghu & Judit Olah & Khurram Shehzad & Mahmood Ahmad, 2022. "Specifying the Domineering Role of Governance in the Long Term Environmental Excellence: A Case Study of Pakistan," SAGE Open, , vol. 12(3), pages 21582440221, September.
    6. Chuimin Kong & Jijian Zhang & Albert Henry Ntarmah & Yusheng Kong & Hong Zhao, 2022. "Carbon Neutrality in the Middle East and North Africa: The Roles of Renewable Energy, Economic Growth, and Government Effectiveness," IJERPH, MDPI, vol. 19(17), pages 1-24, August.
    7. Xiaoyu Yang & Jianqiang Dong & Xiaopeng Guo, 2023. "Spatial Dependence of SO 2 Emissions and Energy Consumption Structure in Northern China," Sustainability, MDPI, vol. 15(3), pages 1-14, January.
    8. Isma Samreen & Muhammad Tariq Majeed, 2022. "Economic development, social–political factors and ecological footprint: a global panel data analysis," SN Business & Economics, Springer, vol. 2(9), pages 1-19, September.
    9. Shehzad, Khurram & Zeraibi, Ayoub & Zaman, Umer, 2022. "Testing the N-shaped environmental Kuznets Curve in Algeria: An imperious role of natural resources and economic globalization," Resources Policy, Elsevier, vol. 77(C).

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