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Fiscal Decentralization, Economic Growth, and Haze Pollution Decoupling Effects: A Simple Model and Evidence from China

Author

Listed:
  • Liangliang Liu

    (University of Science and Technology of China)

  • Donghong Ding

    (University of Science and Technology of China)

  • Jun He

    (University of Science and Technology of China)

Abstract

This study uses the Hamilton function method to explore the dynamic relationships among fiscal decentralization, economic growth, and environmental pollution decoupling under the framework of endogenous growth theory. Furthermore, the study uses a partial derivative method, the results of which reveal that fiscal decentralization and haze pollution decoupling display an inverse U-shaped relationship and that the economic growth rate has a negative effect on haze pollution decoupling. This study uses the panel data of 30 provinces and municipalities of China to perform an empirical investigation. Our findings demonstrate empirical results, which verify the correctness of the theoretical results. This study also uses the threshold regression method to conduct a grouping experimental research and compares the regression results of each group. Our findings demonstrate the degrees of fiscal decentralization and the years that correspond to their turning points have differences. Finally, policies and recommendations are proposed.

Suggested Citation

  • Liangliang Liu & Donghong Ding & Jun He, 2019. "Fiscal Decentralization, Economic Growth, and Haze Pollution Decoupling Effects: A Simple Model and Evidence from China," Computational Economics, Springer;Society for Computational Economics, vol. 54(4), pages 1423-1441, December.
    • Handle: RePEc:kap:compec:v:54:y:2019:i:4:d:10.1007_s10614-017-9700-x
    DOI: 10.1007/s10614-017-9700-x
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    More about this item

    Keywords

    Fiscal decentralization; Economic growth; Haze pollution decoupling; Endogenous growth model; Panel threshold regression; China;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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