Hostname: page-component-8448b6f56d-xtgtn Total loading time: 0 Render date: 2024-04-24T06:25:22.807Z Has data issue: false hasContentIssue false
  • English
  • Français

Is the environment a victim of the economic downturn? Evidence from China's manufacturing firms

Published online by Cambridge University Press:  16 August 2022

Xuemei Zhang ,
Haitao Yin Open the ORCID record for Haitao Yin [Opens in a new window]  and
Huimin Yang
Xuemei Zhang
Affiliation:
Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China
Haitao Yin*
Affiliation:
Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China Institute of Eco-Chongming, Chongming, Shanghai, China
Huimin Yang
Affiliation:
Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China
*
*Corresponding author. E-mail: htyin@sjtu.edu.cn
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper investigates whether pollution-intensive industries develop faster in a time of economic downturn. Using firm-level panel data from 2005 to 2013, we find supporting empirical results in an analysis of China's manufacturing industries in the 2008 economic crisis. We find that pollution-intensive firms tended to produce more compared with non-pollution-intensive firms in the 2008 economic crisis, with the pre-crisis period as a baseline. We further find that this effect is more pronounced in areas with higher export dependence and a smaller proportion of production from pollution-intensive industries. The relatively faster production expansion in pollution-intensive industries is more evident for state-owned enterprises.

Keywords

Chinaeconomic downturneconomic growthenvironmental Kuznets curveenvironmental protection

JEL classification

Q56: Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth R11: Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
Type
Research Article
Information
Environment and Development Economics , Volume 28 , Issue 2 , April 2023 , pp. 191 - 209
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Akbostancı, E, Türüt-Aşık, S and Tunç, Gİ (2009) The relationship between income and environment in Turkey: is there an environmental Kuznets curve? Energy Policy 37, 861–867.CrossRefGoogle Scholar
Amiti, M and Weinstein, DE (2011) Exports and financial shocks. The Quarterly Journal of Economics 126, 1841–1877.CrossRefGoogle Scholar
Archibugi, D, Filippetti, A and Frenz, M (2013) The impact of the economic crisis on innovation: evidence from Europe. Technological Forecasting and Social Change 80, 1247–1260.CrossRefGoogle Scholar
Bae, H (2017) Do plants decrease pollution reduction efforts during a recession? Evidence from upstate New York chemical plants during the US great recession. Environmental and Resource Economics 66, 671–687.CrossRefGoogle Scholar
Bombardini, M and Li, B (2020) Trade, pollution and mortality in China. Journal of International Economics 125, 103321.CrossRefGoogle Scholar
Brandt, L, Van Biesebroeck, J and Zhang, Y (2012) Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing. Journal of Development Economics 97, 339–351.CrossRefGoogle Scholar
Carson, RT (2010) The environmental Kuznets curve: seeking empirical regularity and theoretical structure. Review of Environmental Economics and Policy 4, 3–23.CrossRefGoogle Scholar
Castellanos, P and Boersma, KF (2012) Reductions in nitrogen oxides over Europe driven by environmental policy and economic recession. Scientific Reports 2, 265.CrossRefGoogle ScholarPubMed
Central Government of The People's Republic of China (2009) National Development and Reform Commission: The arrangement of 4 trillion RMB investment projects has been adjusted as needed. Available at http://www.gov.cn/gzdt/2009-03/09/content_1254645.htm (in Chinese).Google Scholar
Central Government of The People's Republic of China (2010) Ministry of Environmental Protection: Responding to the Financial Crisis and Promoting a Historic Change in Environmental Protection. Available at http://www.gov.cn/gzdt/2010-01/25/content_1518609.htm (in Chinese).Google Scholar
Chang, SS, Stuckler, D, Yip, P and Gunnell, D (2013) Impact of 2008 global economic crisis on suicide: time trend study in 54 countries. BMJ 347, f5239.CrossRefGoogle ScholarPubMed
Cho, Y and Newhouse, D (2011) How did the great recession affect different types of workers? Evidence from 17 middle-income countries. World Development 41, 31–50.CrossRefGoogle Scholar
Cole, MA (2004) Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages. Ecological Economics 48, 71–81.CrossRefGoogle Scholar
Dasgupta, S, Laplante, B, Wang, H and Wheeler, D (2002) Confronting the environmental Kuznets curve. Journal of Economic Perspectives 16, 147–168.CrossRefGoogle Scholar
Deichmann, U, Reuter, A, Vollmer, S and Zhang, F (2019) The relationship between energy intensity and economic growth: new evidence from a multi-country multi-sectorial dataset. World Development 124, 104664.CrossRefGoogle Scholar
Dinda, S (2004) Environmental Kuznets curve hypothesis: a survey. Ecological Economics 49, 431–455.CrossRefGoogle Scholar
Du, Y and Xie, Z (2017) Global financial crisis making a V-shaped fluctuation in NO2 pollution over the Yangtze River Delta. Journal of Meteorological Research 31, 438–447.CrossRefGoogle Scholar
Eaton, J, Kortum, S, Neiman, B and Romalis, J (2016) Trade and the global recession. American Economic Review 106, 3401–3438.CrossRefGoogle Scholar
Grossman, GM and Krueger, AB (1991) Environmental impacts of a North American Free Trade Agreement. Social Science Electronic Publishing 8, 223–250.Google Scholar
Haider, A, Bashir, A and Husnain, MIU (2020) Impact of agricultural land use and economic growth on nitrous oxide emissions: evidence from developed and developing countries. Science of the Total Environment 741, 140421.CrossRefGoogle ScholarPubMed
He, J and Richard, P (2010) Environmental Kuznets curve for CO2 in Canada. Ecological Economics 69, 1083–1093.CrossRefGoogle Scholar
He, J and Wang, H (2012) Economic structure, development policy and environmental quality: an empirical analysis of environmental Kuznets curves with Chinese municipal data. Ecological Economics 76, 49–59.CrossRefGoogle Scholar
He, G, Pan, Y and Zhang, B (2019) Trade openness, pollution, and growth: evidence from China, 1998–2008. 2019 Annual Meeting, Agricultural and Applied Economics Association, July 21–23, 2019, Atlanta, Georgia.Google Scholar
He, G, Xie, Y and Zhang, B (2020) Expressways, GDP, and the environment: the case of China. Journal of Development Economics 145, 102485.CrossRefGoogle Scholar
Hering, L and Poncet, S (2014) Environmental policy and exports: evidence from Chinese cities. Journal of Environmental Economics and Management 68, 296–318.CrossRefGoogle Scholar
Li, GJ (2020) The prospectus for the environmental protection in 2020. Available at http://www.mee.gov.cn (in Chinese).Google Scholar
Liu, J and Raven, PH (2010) China's environmental challenges and implications for the world. Critical Reviews in Environmental Science and Technology 40, 823–851.CrossRefGoogle Scholar
Ministry of Environmental Protection (2010) Exploring a new road and opening up a new situation – a review of the historic transformation of environmental protection in response to the international financial crisis. Available at http://www.gov.cn/gzdt/2010-01/25/content_1518609.htm (in Chinese).Google Scholar
Panayotou, T (1993) Empirical Tests and Policy Analysis of Environmental Degradation at Different Stages of Economic Development. Geneva: ILO, Technology and Employment Programme.Google Scholar
People's Daily Online (2009) The officials of the Ministry of Environmental Protection talks about the current environmental protection situation and tasks. Available at http://news.sohu.com/20090311/n262737532.shtml (in Chinese).Google Scholar
Perman, R and Stern, DI (2003) Evidence from panel unit root and cointegration tests that the environmental Kuznets curve does not exist. Australian Journal of Agricultural and Resource Economics 47, 325–347.CrossRefGoogle Scholar
Peters, GP, Marland, G, Le Quéré, C, Boden, T, Canadell, JG and Raupach, MR (2011) Rapid growth in CO2 emissions after the 2008–2009 global financial crisis. Nature Climate Change 2, 2–4.CrossRefGoogle Scholar
Pothen, F and Welsch, H (2019) Economic development and material use. Evidence from international panel data. World Development 115, 107–119.CrossRefGoogle Scholar
Sarkodie, SA and Strezov, V (2019) A review on environmental Kuznets curve hypothesis using bibliometric and meta-analysis. Science of the Total Environment 649, 128–145.CrossRefGoogle ScholarPubMed
Southern Weekly (2009) Environmental protection in the recent investment trend. 18 June 2009. Available at https://www.solidwaste.com.cn/news/175297.html (in Chinese).Google Scholar
Stern, DI (2004) The rise and fall of the environmental Kuznets curve. World Development 32, 1419–1439.CrossRefGoogle Scholar
van den Bijgaart, IM and Smulders, S (2018) Does a recession call for less stringent environmental policy? A partial-equilibrium second-best analysis. Environmental and Resource Economics 70, 807–834.CrossRefGoogle Scholar
Vincent, JR (1997) Testing for environmental Kuznets curves within a developing country. Environment and Development Economics 2, 417–431.CrossRefGoogle Scholar
Wang, H and Jin, Y (2007) Industrial ownership and environmental performance: evidence from China. Environmental and Resource Economics 36, 255–273.CrossRefGoogle Scholar
Wang, H and Wheeler, D (2003) Equilibrium pollution and economic development in China. Environment and Development Economics 3, 451–466.CrossRefGoogle Scholar
Xu, T (2018) Investigating environmental Kuznets curve in China – aggregation bias and policy implications. Energy Policy 114, 315–322.CrossRefGoogle Scholar
Yang, Z and Zhang, C (2015) Does the “Labor Contract Law” improve the wage distortion – evidence from Chinese industry. Industrial Economics Research 5, 52–62 (in Chinese).Google Scholar
Yang, H, Chen, S and Zhou, Y (2008) Local government competition and environmental policy – empirical evidence from province's governments in China. South China Journal of Economics 6, 15–30 (in Chinese).Google Scholar
Zhou, L (2004) The incentive and cooperation of government officials in the political tournaments: an interpretation of the prolonged local protectionism and duplicative investments in China. Economic Research Journal 6, 33–40 (in Chinese).Google Scholar
Supplementary material: PDF

Zhang et al. supplementary material

Zhang et al. supplementary material
Download Zhang et al. supplementary material(PDF)
PDF 119 KB