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The Impact of Environmental Regulations, Corruption and Economic Freedom on Economic Growth: Empirical Evidence from China

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  • Najla Shariff Omar Al Baiti
  • Navaz Naghavi
  • Benjamin Chan Yin Fah

Abstract

The purpose of this study is to investigate the impact of environmental regulations, corruption and economic freedom on economic growth in China. Different indices were used as measurements of the variables; Environmental Policy Stringency Index, Control of Corruption Index and Economic Freedom of the World Index. The study uses quantitative methods to empirically determine which factors play a role in China¡¯s progressive economic growth rates. Unit root test, Johansen cointegration and the Autoregressive Distributed Lag (ARDL) modelling were applied to examine the short and long run correlations. Results indicated that there is in fact a correlation between environmental regulations, corruption, economic freedom and economic growth. Long run coefficients demonstrated that environmental regulations had a negative impact on economic growth, while corruption and economic freedom displayed positive results. However, short run coefficients showed that environmental regulation is insignificant in the short run, corruption maintains a positive impact and economic freedom negatively effects economic growth in the short run.

Suggested Citation

  • Najla Shariff Omar Al Baiti & Navaz Naghavi & Benjamin Chan Yin Fah, 2017. "The Impact of Environmental Regulations, Corruption and Economic Freedom on Economic Growth: Empirical Evidence from China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(11), pages 92-99, November.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:11:p:92-99
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    References listed on IDEAS

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    3. Mendez, Fabio & Sepulveda, Facundo, 2006. "Corruption, growth and political regimes: Cross country evidence," European Journal of Political Economy, Elsevier, vol. 22(1), pages 82-98, March.
    4. Mohammad Habibullah Pulok & Moin Uddin Ahmed, 2017. "Does corruption matter for economic development? Long run evidence from Bangladesh," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 44(3), pages 350-361, March.
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    Cited by:

    1. Ren, Yi-Shuai & Ma, Chao-Qun & Apergis, Nicholas & Sharp, Basil, 2021. "Responses of carbon emissions to corruption across Chinese provinces," Energy Economics, Elsevier, vol. 98(C).

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    More about this item

    Keywords

    economic freedom; economic growth; panel data analysis;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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