IDEAS home Printed from https://ideas.repec.org/a/spr/lsprsc/v15y2022i3d10.1007_s12076-021-00285-2.html
   My bibliography  Save this article

The existence and mechanism of the domestic pollution haven hypothesis: evidence from 265 cities in China

Author

Listed:
  • Shimei Wu

    (Hunan University)

  • Haotian Zhang

    (University of Birmingham)

Abstract

This paper provides a synthetic framework for the verification of the existence and mechanism of the Domestic Pollution Haven Hypothesis (DPHH). We infer the existence of DPHH by estimating the Spatial Environmental Kuznets Curve (SEKC). Results show that the SEKC exists significantly at the city level in China with a U-shape, which supports the DPHH. Based on the pollution transfer calculated from a traditional EKC, we estimate the strategic responses of cities towards the behavior of neighboring cities, by using the Two-Regime Spatial Durbin Model (TR-SDM). We find that the “Race to Bottom/Excellence” strategy dominates the pollution transfer at the city level in China. This paper has important policy implications for the environmental inspection and the differentiation of foreign industries.

Suggested Citation

  • Shimei Wu & Haotian Zhang, 2022. "The existence and mechanism of the domestic pollution haven hypothesis: evidence from 265 cities in China," Letters in Spatial and Resource Sciences, Springer, vol. 15(3), pages 287-310, December.
    • Handle: RePEc:spr:lsprsc:v:15:y:2022:i:3:d:10.1007_s12076-021-00285-2
    DOI: 10.1007/s12076-021-00285-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12076-021-00285-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12076-021-00285-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yongjian Liu & Hong Geng, 2019. "Regional Competition in China under the Price Distortion of Construction Land: A Study Based on a Two‐regime Spatial Durbin Model," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 27(4), pages 104-126, July.
    2. Matthew A. Cole & Robert J.R. Elliott & Jing Zhang, 2011. "Growth, Foreign Direct Investment, And The Environment: Evidence From Chinese Cities," Journal of Regional Science, Wiley Blackwell, vol. 51(1), pages 121-138, February.
    3. Jean-Marie Grether & Nicole Andréa Mathys & Jaime de Melo, 2015. "Unravelling the Worldwide Pollution Haven Effect," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 23, pages 581-612, World Scientific Publishing Co. Pte. Ltd..
    4. Zhang, Chuanguo & Zhou, Xiangxue, 2016. "Does foreign direct investment lead to lower CO2 emissions? Evidence from a regional analysis in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 943-951.
    5. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    6. James P. Lesage, 2008. "An Introduction to Spatial Econometrics," Revue d'économie industrielle, De Boeck Université, vol. 0(3), pages 19-44.
    7. Liu, Yiming & Hao, Yu & Gao, Yixuan, 2017. "The environmental consequences of domestic and foreign investment: Evidence from China," Energy Policy, Elsevier, vol. 108(C), pages 271-280.
    8. Christopher Barrington-Leigh & Jill Baumgartner & Ellison Carter & Brian E. Robinson & Shu Tao & Yuanxun Zhang, 2019. "An evaluation of air quality, home heating and well-being under Beijing’s programme to eliminate household coal use," Nature Energy, Nature, vol. 4(5), pages 416-423, May.
    9. Kearsley, Aaron & Riddel, Mary, 2010. "A further inquiry into the Pollution Haven Hypothesis and the Environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 69(4), pages 905-919, February.
    10. Matthew A. Cole & Robert J. R. Elliott, 2005. "FDI and the Capital Intensity of “Dirty” Sectors: A Missing Piece of the Pollution Haven Puzzle," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 530-548, November.
    11. J. Paul Elhorst & Sandy Fréret, 2009. "Evidence Of Political Yardstick Competition In France Using A Two‐Regime Spatial Durbin Model With Fixed Effects," Journal of Regional Science, Wiley Blackwell, vol. 49(5), pages 931-951, December.
    12. Balado-Naves, Roberto & Baños-Pino, José Francisco & Mayor, Matías, 2018. "Do countries influence neighbouring pollution? A spatial analysis of the EKC for CO2 emissions," Energy Policy, Elsevier, vol. 123(C), pages 266-279.
    13. David M. Konisky, 2007. "Regulatory Competition and Environmental Enforcement: Is There a Race to the Bottom?," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 853-872, October.
    14. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
    15. J. Paul Elhorst, 2003. "Specification and Estimation of Spatial Panel Data Models," International Regional Science Review, , vol. 26(3), pages 244-268, July.
    16. Cole, Matthew A., 2004. "Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages," Ecological Economics, Elsevier, vol. 48(1), pages 71-81, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haider Mahmood & Maham Furqan & Muhammad Shahid Hassan & Soumen Rej, 2023. "The Environmental Kuznets Curve (EKC) Hypothesis in China: A Review," Sustainability, MDPI, vol. 15(7), pages 1-32, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wen Jun & Muhammad Zakaria & Syed Jawad Hussain Shahzad & Hamid Mahmood, 2018. "Effect of FDI on Pollution in China: New Insights Based on Wavelet Approach," Sustainability, MDPI, vol. 10(11), pages 1-20, October.
    2. Yu, Yantuan & Peng, Chong & Li, Yushuang, 2019. "Do neighboring prefectures matter in promoting eco-efficiency? Empirical evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 456-465.
    3. Jianhuan Huang & Jiejin Xia, 2016. "Regional Competition, Heterogeneous Factors and Pollution Intensity in China: A Spatial Econometric Analysis," Sustainability, MDPI, vol. 8(2), pages 1-26, February.
    4. Assad Ullah & Xinshun Zhao & Muhammad Abdul Kamal & Jiajia Zheng, 2022. "Environmental regulations and inward FDI in China: Fresh evidence from the asymmetric autoregressive distributed lag approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1340-1356, January.
    5. José M. Cansino & Rocio Román-Collado & Juan C. Molina, 2019. "Quality of Institutions, Technological Progress, and Pollution Havens in Latin America. An Analysis of the Environmental Kuznets Curve Hypothesis," Sustainability, MDPI, vol. 11(13), pages 1-20, July.
    6. Ekundayo P. Mesagan & Wakeel A. Isola & Kazeem B. Ajide, 2019. "The capital investment channel of environmental improvement: evidence from BRICS," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(4), pages 1561-1582, August.
    7. Fozia Latif Gill & K Kuperan Viswanathan & Mohd Zaini Abdul Karim, 2018. "The Critical Review of the Pollution Haven Hypothesis (PHH)," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 167-174.
    8. Tan, Ruipeng & Xu, Mengmeng & Qiao, Gang & Wu, Huaqing, 2023. "FDI, financial market development and nonlinearities of energy and environmental efficiency in China: Evidence from both parametric and nonparametric models," Energy Economics, Elsevier, vol. 119(C).
    9. Yunyi Hu & Haitao Yin & Jon J. Moon, 2022. "Environmental regulation and foreign investment: Evidence from China," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(4), pages 862-883, November.
    10. Demena, Binyam Afewerk & Afesorgbor, Sylvanus Kwaku, 2020. "The effect of FDI on environmental emissions: Evidence from a meta-analysis," Energy Policy, Elsevier, vol. 138(C).
    11. Xindi Xu & Xinjun Wang, 2021. "The Spatial Correlation between Foreign Direct Investment and Air Quality in China and the Potential Channel," Sustainability, MDPI, vol. 13(11), pages 1-25, June.
    12. Saibu Muibi Olufemi & Mesagan Ekundayo Peter, 2016. "Environmental Quality and Growth Effects of Foreign Direct Investment in Nigeria," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(2), pages 125-140, Spring.
    13. Wang, Hao & Luo, Qi, 2022. "Can a colonial legacy explain the pollution haven hypothesis? A city-level panel analysis," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 482-495.
    14. Solarin, Sakiru Adebola & Al-Mulali, Usama & Musah, Ibrahim & Ozturk, Ilhan, 2017. "Investigating the pollution haven hypothesis in Ghana: An empirical investigation," Energy, Elsevier, vol. 124(C), pages 706-719.
    15. Shahbaz, Muhammad & Balsalobre-Lorente, Daniel & Sinha, Avik, 2019. "Foreign Direct Investment–CO2 Emissions Nexus in Middle East and North African countries: Importance of Biomass Energy Consumption," MPRA Paper 91729, University Library of Munich, Germany, revised 19 Jan 2019.
    16. Llorca, Manuel & Rodriguez-Alvarez, Ana, 2024. "Economic, environmental, and energy equity convergence: Evidence of a multi-speed Europe?," Ecological Economics, Elsevier, vol. 219(C).
    17. Shahbaz, Muhammad & Nasreen, Samia & Abbas, Faisal & Anis, Omri, 2015. "Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries?," Energy Economics, Elsevier, vol. 51(C), pages 275-287.
    18. Song, Wenfei & Han, Xianfeng, 2022. "The bilateral effects of foreign direct investment on green innovation efficiency: Evidence from 30 Chinese provinces," Energy, Elsevier, vol. 261(PB).
    19. Hunjra, Ahmed Imran & Bouri, Elie & Azam, Muhammad & Azam, Rauf I & Dai, Jiapeng, 2024. "Economic growth and environmental sustainability in developing economies," Research in International Business and Finance, Elsevier, vol. 70(PA).
    20. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute of Labor Economics (IZA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:lsprsc:v:15:y:2022:i:3:d:10.1007_s12076-021-00285-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.