Government's environmental protection expenditure in China: The role of Internet penetration

Abstract

This study attempts to investigate the effect of the Internet penetration on government's environmental protection expenditure (GEPE). On the basis of Chinese provincial panel data from 2007 to 2016, this paper estimates a dynamic panel model by employing the system generalized method of moments (GMM). We find a significant positive relationship between Internet penetration and the GEPE in China, and this conclusion remains consistent after conducting several robustness checks. In addition, we further identify three potential mechanisms to explain how Internet penetration affects the GEPE, namely, the popularity of the Internet contributes to restraining government's behaviors, improving government's responsiveness to public's needs, and enhancing public's environmental protection awareness. The findings shed light on several issues in environmental policy, for instance, the relationship between information and communication technology (ICT) and sustainable development.