The spatial dynamic relationship between haze pollution and economic growth: new evidence from 285 prefecture-level cities in China

Abstract

Numerous studies have examined the correlation between haze pollution and economic growth, but few have focused on the bilateral causality and spatial dependence of the relationship simultaneously. With a recent, large sample of 285 Chinese prefecture-level cities over the period from 1998 to 2016, the dynamic relationship between economic growth and PM2.5 concentration was investigated in China and different geographical regions via the generalized spatial three-stage least squares method (GS3SLS). In addition, the spatial spillover effects of PM2.5 concentration and economic growth were explored, and the socioeconomic factors of the feedback effects of haze pollution on economic growth were identified. The results indicate the following: (1) There is an inverted U-shaped relationship between economic growth and haze pollution, and haze pollution can, in turn, inhibit economic growth; (2) haze pollution and economic growth have an obvious spatial spillover effect that closely links neighboring areas, such that haze pollution has a clear and significant positive spatial spillover, and the spatial effect of economic growth depends on the regional characteristics; (3) environmental regulation has significance in explaining the inhibitory effect of haze pollution on economic growth; and (4) heterogeneity by geographical region and urban agglomeration is observed in the relationship between haze pollution and economic growth. Therefore, it is urgent to control haze pollution and avoid oversimplified and crude environmental regulation measures that may damage economic growth. Multiregional joint governance, systematic environmental regulation and technical environmental regulation should be strengthened.