Research on Environmental Regulation Competition of China Based on Spatial Panel Model

Abstract

Abstract:

Based on the panel data of 31 provinces during 1996-2012(except Hong Kong, Macao and Taiwan), utilizing spatial panel econometric methods, this paper empirically tests the existence and patterns of environmental regulation competition among Chinese local governments. Results show a significantly existence of Chinese provincial environmental regulation competition. It also shows significant spillover effects across borders, the local governments show obvious "free-rider" motivation on the industrial pollution abatements which cost more and have positive externalities, such as industrial sulfur dioxide and powder. At the same time the competition become weaker with the increase of the proportion of environmental quality in the performance appraisal system. In addition, we find that with the development of regional economy, the intensity of environmental regulation competition shows a trend of first increase and then decrease. The evidence of competition is founded mainly in the middle part of China where economic development is in medium level, while in the eastern and west regions, the competition is relatively insignificant. Therefore, the policy making of performance appraisal system and the implementation of industrial pollution abatement should consider the spatial heterogeneity of local government competition and types of pollutants.

Key words: environmental regulation competition, spatial econometric model, provincial panel

Wang Yucheng. Research on Environmental Regulation Competition of China Based on Spatial Panel Model[J]. , 2015, 27(8): 23-32.

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