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Economic growth drag in the Central China: evidence from a panel analysis

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  • Yaobin Liu

Abstract

This article employs recently developed panel methods to test for unit roots, cointegration and Granger causality to justify and estimate the drag induced by resource constraint and environmental pollution for the Central China. The results of the panel cointegration test show that there is a stable long run relationship amongst total output, capital, labour, land, water and SO 2 when total output is the dependent variable. The results of the causality test with Error Correction Model (ECM) analysis suggest that the available water resource and environmental pollutant have no impacts on total output temporarily, but in the long‐run there is a Granger causality running from these variables to total output, indicating the economic growth drag induced by the natural resource and environmental pollution can be further estimated. Given the stable cointegration and significant Granger causality being, the study shows that the drag on the total output reduces annual economic growth rate by about 1.1 percentage points for the Central China as a whole and there is a significant difference on the aggregated and disaggregated drags for the six provinces, which indicates that natural resource and environmental constraints so far incorporated into production probably have a modest effect over the past 31 years for the Central China.

Suggested Citation

  • Yaobin Liu, 2013. "Economic growth drag in the Central China: evidence from a panel analysis," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2163-2174, June.
    • Handle: RePEc:taf:applec:45:y:2013:i:16:p:2163-2174
    DOI: 10.1080/00036846.2012.654917
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    Cited by:

    1. Caijing Zhao & Yuming Wu & Xinyue Ye & Baijun Wu & Sonali Kudva, 2019. "The direct and indirect drag effects of land and energy on urban economic growth in the Yangtze River Delta, China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(6), pages 2945-2962, December.
    2. Yuchen Pan & Li Ma & Hong Tang & Yiwen Wu & Zhongjian Yang, 2021. "Land Use Transitions under Rapid Urbanization in Chengdu-Chongqing Region: A Perspective of Coupling Water and Land Resources," Land, MDPI, vol. 10(8), pages 1-21, August.

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