Spatial Econometric Analysis on the Exports-PM2.5 Emissions Nexus: Evidence from the Chinese Smog Provinces

Abstract

The study presents an empirical analysis to investigate the effect of export volume and significant factors on PM2.5 emissions in the highest concentrations of air pollution provinces in China during 1998-2015. This paper proposes a spatial econometric model based on an extended Stochastic Impact by Regression on Population, Affluence, and Technology (STIRPAT) model. The results revealed evidence that spatial spillover effects of PM2.5 emissions exist among major provinces. Provinces in the northeast, south-central China, and north China regions have more potential in reducing PM2.5 emissions. Exports per capita have negative and significant effects on PM2.5 emissions, which revealed that an increase in own-province exports per capita would reduce the PM2.5 concentrations of both own province and the neighboring provinces. Also, the results confirm the existence of an inverted-U shaped Environmental Kuznets Curve (EKC) between PM2.5 emissions and economic growth. Surprisingly, the study doesn’t validate the pollution haven hypothesis (PHH). Along a similar line, the empirical evidence has shown that the private vehicle has a significant impact on PM2.5 concentrations, whereas energy intensity exerts a negative effect. Other policy suggestions put forth for policymakers on reducing PM2.5 emissions.