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The Transformation To Sustainable Development And Economic Growth: Evidence From China

Author

Listed:
  • RUI LI

    (School of Economics, Fudan University, No. 600, Guoquan Road, Yangpu District, Shanghai, P. R. China)

  • LITIAN YU

    (School of Economics, Fudan University, No. 600, Guoquan Road, Yangpu District, Shanghai, P. R. China)

  • JUN ZHANG

    (School of Economics, Fudan University, No. 600, Guoquan Road, Yangpu District, Shanghai, P. R. China)

Abstract

This paper studies how the transformation to sustainable development affects short-term economic growth. In late 2013, the Chinese central government proposed a sustainable development transformation (SDT) program for resource-based regions, mainly targeted at improving environmental quality, promoting alternative industries, and improving social well-being. With the use of a difference-in-differences (DID) framework, our estimation shows that this program significantly reduces GDP per capita in resource-based counties by 5.1%. Mechanism analysis indicates that local governments implementing stricter environmental regulation, the failure of alternative industry strategies and the decline of officials’ economic growth incentive with the appraisal shift are the main channels through which the SDT program negatively impacts short-term economic growth. Further analysis indicates that this program improves environmental quality, but the employment and income of residents are negatively affected. Our findings provide valuable policy implications for developing countries to better balance economic growth and sustainable development.

Suggested Citation

  • Rui Li & Litian Yu & Jun Zhang, 2024. "The Transformation To Sustainable Development And Economic Growth: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 69(05), pages 1629-1657, September.
    • Handle: RePEc:wsi:serxxx:v:69:y:2024:i:05:n:s0217590823420031
    DOI: 10.1142/S0217590823420031
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    More about this item

    Keywords

    Sustainable development; economic growth; resource-based regions; environmental regulation;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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