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Fiscal Decentralization and Environmental Pollution: A Spatial Analysis

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  • Xia Chen
  • Jianmin Liu

Abstract

Based on annual data over the period 2003 to 2017 covering 31 provinces in China, the environmental pollution index and environmental regulation index are constructed. Moran’s I , the widely used spatial autocorrelation index, is used to analyze the spatial distribution of environmental pollution, which provides a fairly high stability of the positive spatial correlation of environmental pollution. Then, the 0-1 matrix, distance weighting matrix, and economic distance mixed matrix are carried out to weigh space separately. To analyze the impact of fiscal decentralization on environmental pollution, the spatial Durbin model is employed. In the meanwhile, fiscal decentralization is measured from the perspective of both fiscal expenditure decentralization and fiscal revenue decentralization. The results show that the impact of fiscal decentralization on environmental pollution is positive and appears the phenomenon of “race to bottom.” To improve environmental quality, appropriate environmental regulation target, implementing green GDP accounting, and adjusting economic structure should be adopted.

Suggested Citation

  • Xia Chen & Jianmin Liu, 2020. "Fiscal Decentralization and Environmental Pollution: A Spatial Analysis," Discrete Dynamics in Nature and Society, Hindawi, vol. 2020, pages 1-10, March.
    • Handle: RePEc:hin:jnddns:9254150
    DOI: 10.1155/2020/9254150
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    Cited by:

    1. Maxwell Chukwudi Udeagha & Marthinus Christoffel Breitenbach, 2023. "The Role of Fiscal Decentralization in Limiting CO2 Emissions in South Africa," Biophysical Economics and Resource Quality, Springer, vol. 8(3), pages 1-30, September.
    2. Liu, Fengyu & Feng, Jue & Zhai, Ge & Razzaq, Asif, 2022. "Influence of fiscal decentralization and renewable energy investment on ecological sustainability in EU: What is the moderating role of institutional governance?," Renewable Energy, Elsevier, vol. 200(C), pages 1265-1274.
    3. Sun, Yunpeng & Gao, Pengpeng & Razzaq, Asif, 2023. "How does fiscal decentralization lead to renewable energy transition and a sustainable environment? Evidence from highly decentralized economies," Renewable Energy, Elsevier, vol. 206(C), pages 1064-1074.
    4. Hengzhou Xu & Xiaoyan Li, 2023. "Effect mechanism of Chinese-style decentralization on regional carbon emissions and policy improvement: evidence from China’s 12 urban agglomerations," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(1), pages 474-505, January.
    5. Li, Xin & Li, Zheng & Su, Chi-Wei & Umar, Muhammad & Shao, Xuefeng, 2022. "Exploring the asymmetric impact of economic policy uncertainty on China's carbon emissions trading market price: Do different types of uncertainty matter?," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    6. Maxwell Chukwudi Udeagha & Marthinus Christoffel Breitenbach, 2023. "Revisiting the nexus between fiscal decentralization and CO2 emissions in South Africa: fresh policy insights," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-46, December.
    7. Shao, Shuai & Razzaq, Asif, 2022. "Does composite fiscal decentralization reduce trade-adjusted resource consumption through institutional governance, human capital, and infrastructure development?," Resources Policy, Elsevier, vol. 79(C).
    8. Nadiia Davydenko & Natalia Wasilewska & Svitlana Boiko & Mirosław Wasilewski, 2022. "Development of Rural Areas in Ukraine in the Context of Decentralization: An Empirical Study," Sustainability, MDPI, vol. 14(11), pages 1-26, May.
    9. Shan, Shan & Ahmad, Munir & Tan, Zhixiong & Adebayo, Tomiwa Sunday & Man Li, Rita Yi & Kirikkaleli, Dervis, 2021. "The role of energy prices and non-linear fiscal decentralization in limiting carbon emissions: Tracking environmental sustainability," Energy, Elsevier, vol. 234(C).
    10. Meng Lingyan & Ze Zhao & Haider Ali Malik & Asif Razzaq & Hui An & Marria Hassan, 2022. "Asymmetric impact of fiscal decentralization and environmental innovation on carbon emissions: Evidence from highly decentralized countries," Energy & Environment, , vol. 33(4), pages 752-782, June.
    11. Sun, Yunpeng & Guan, Weimin & Razzaq, Asif & Shahzad, Mohsin & Binh An, Nguyen, 2022. "Transition towards ecological sustainability through fiscal decentralization, renewable energy and green investment in OECD countries," Renewable Energy, Elsevier, vol. 190(C), pages 385-395.
    12. Zhao Yang, 2023. "Can the Digitalization Reduce Carbon Emission Intensity?—The Moderating Effects of the Fiscal Decentralization," Sustainability, MDPI, vol. 15(11), pages 1-16, June.
    13. Feng Wang & Tayyaba Rani & Asif Razzaq, 2023. "Environmental impact of fiscal decentralization, green technology innovation and institution’s efficiency in developed countries using advance panel modelling," Energy & Environment, , vol. 34(4), pages 1006-1030, June.

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