Inclusive infrastructure development, green innovation, and sustainable resource management: Evidence from China’s trade-adjusted material footprints

Abstract

Depleting scarce resources and environmental deterioration are critical issues to address in the contemporary world. Particularly, China has shown exponential growth in infrastructure construction, international trade, and embodied innovation in the last few years. Aggressive infrastructure-led growth and urbanization have created unremitting pressure on China’s resource consumption. Therefore, this study analyzes the asymmetric impact of resource depletion associated with Chinese infrastructure development and urbanization by controlling the effects of green innovation and economic growth from 1990 to 2018. Consumption-based material footprint (MF) is used to quantify resource consumption from domestic activity. This study employ novel Quantile ARDL approach to integrating aromaticity arising from structural changes, policy shifts, financial or economic shocks, and data abnormality confirmed through preliminary tests. The long-run results show that infrastructure development, urbanization, and economic growth significantly contribute to MF. However, these effects substantially varied across lower, medium, and higher quantiles. The positive impact of infrastructure development is highest for higher quantiles of MF, while the impact of urbanization is highest at lower quantiles. Green innovation significantly decreases the MF, mainly at higher quantiles. Besides, the study validates Environmental Kuznets Curve hypothesis in the long run. Similar results are observed in the shorter run; however, their significance and magnitude are substantially lower due to the long-term transmission of model variables. These results offer valuable policy recommendations.