Chinese Provincial Panel Data Research Articles

Environmental regulations, capacity utilization, and high-quality development of manufacturing: an analysis based on Chinese provincial panel data

The high-quality development of the manufacturing industry is an important strategic task for Chinese economic development. The rapid development of the manufacturing industry is also accompanied by problems such as overcapacity and environmental pollution. This paper analyzes the impact of capacity utilization on the high-quality development of manufacturing and establishes a nonlinear threshold regression model on this basis, and studies and analyzes environmental regulations as a threshold variable under the influence of capacity utilization rate on the high-quality development of the manufacturing industry. The research results show that: capacity utilization, profitability, foreign direct investment, and government participation all have a significant positive impact on the high-quality development of the manufacturing industry; environmental regulations have a significant negative impact on the high-quality development of the manufacturing industry. And in the model of the effect of capacity utilization on the high-quality development of the manufacturing industry, environmental regulation has a single threshold effect. With the increase in the intensity of environmental regulation, the coefficient and significance of the effect of capacity utilization on the high-quality development of the manufacturing industry have changed. Finally, this article puts forward corresponding policies and suggestions based on the results of data analysis.

How crop insurance influences agricultural green total factor productivity: Evidence from Chinese farmers

As an effective risk guarantee mechanism, crop insurance can not only disperse agricultural operation risk, but also guide the agricultural green development. Based on Chinese provincial panel data from 2002 to 2015, this paper uses SBM-GML (Global-Malmquist-Luenberger) index model to measure agricultural green total factor productivity and systematically examines the impact of crop insurance on agricultural green total factor productivity as well as its mechanism. This study supplements the determinants of agricultural green total factor productivity. It is found that crop insurance has a significant positive impact on agricultural green total factor productivity. The promotion effect of crop insurance on agricultural green total factor productivity increases with the expanded use of agricultural green technologies such as precision sowing, deep fertilization, subsoiling and no-tillage. Moreover, our results show that the role of crop insurance in promoting agricultural green total factor productivity increases with the increase in operational scales. In addition, compared with food crops, the promotion effect is stronger for cash crops. Therefore, the Chinese government should continue to support the implementation of crop insurance policy. It is necessary to not only increase crop insurance subsidies, but also set up differentiated subsidy systems in different operational scales and planting structures to promote agricultural green development.

Linking Innovative Human Capital, Economic Growth, and CO2 Emissions: An Empirical Study Based on Chinese Provincial Panel Data.

To study the economic and environmental effects of human capital, previous studies measure human capital based on education; however, this approach has many shortcomings because not all educated people are innovative human capital. Hence, this study introduces the concept of innovative human capital by developing a new index that measures human capital based on the number of patents every one million R&D staff full-time equivalent. After this, this paper studies the impact of innovative human capital on CO2 emissions in China. The provincial panel data of 30 Chinese provinces from 2003 to 2017 is analyzed using the fixed effect, ordinary least squares, and the system generalized method of moments (SYS-GMM). The analysis revealed that innovative human capital alleviates environmental deterioration in China. The findings unfold the existence of the environmental Kuznets curve (EKC) considering innovative human capital in the model. It implies that Chinese economic development will eventually support environmental sustainability if China continues to develop its innovative human capital. Among the control variables, economic structure, population density, and energy intensity stimulate environmental degradation by increasing CO2 emissions. However, FDI has a negative relationship with CO2 emissions. Lastly, the study proposes comprehensive policies to increase innovative human capital for environmental sustainability.

Could government lead the way? Evaluation of China's patent subsidy policy on patent quality

As China aimed to transform her growth into an innovation-driven model, we study the impact of China's effort to promote technology inventions. By linking to Google Patents, we compile a comprehensive set of patent quality indicators. Based on Chinese provincial panel data from 1995 to 2010, we find that the effect of the implemented patent subsidy policies on quantity, as well as various quality metrics of patents, was significantly positive. Moreover, the explanation power of subsidy policies on both patent quantity and quality diminished as time goes by. We also find that the effect of these policies depended on the growth rate of experienced innovators rather than entrants. Since the implemented policies we study in this paper were designed to focus on subsidizing expenses incurred during the patenting process, our results show that the provided partial funding led the way for improving China's patent quality.

Application of panel data-generalized method of moments on the impact of urban output

This article summarized the mechanism of the impact of real estate tax on city output path, on the basis of selecting the Chinese provincial panel data from 2005 to 2019, by using the PD - GMM method. The real estate tax was taken as the core explanation variable, and was added a lot of control variables to establish the impact of real estate tax on city output 7 panel data models. We estimated and analyzed the robustness through Eviews software. Research results showed that: (1) from the national level, the real estate industry tax would have a significant effect on urban output, and there is a "U" shaped relationship between the output and the real estate tax and cities. At the beginning of the urban development, the city real estate tax inhibited output, when the urban economy was in the period of high quality development. The real estate tax on urban output result, had obvious function. (2) At the regional level, the real estate tax in the eastern region had a negative inhibitory effect on the urban revenue, while the real estate tax in the western region had a significant promoting effect on the urban revenue, and the influence degree was shown as the eastern>western>middle. (3) The more real estate investment and human capital are tilted to the west, the more favorable the development of the western region, while the impact on the eastern and central regions was not significant.

Research on the Relationship between Prices of Agricultural Production Factors, Food Consumption Prices, and Agricultural Carbon Emissions: Evidence from China’s Provincial Panel Data

China is a large agricultural country with a high level of agricultural carbon emissions. Whether market prices can be used in agricultural production as a means of agricultural carbon emissions reduction is of great significance to improve the allocation of agricultural production factors and expand large-scale production. This paper applies an autoregressive distributed lag–pooled mean group(ARDL–PMG) model to evaluate the relationship between agricultural production factor prices, food consumption prices, and agricultural carbon emissions, using Chinese provincial panel data from 1994 to 2018. The results show that agricultural carbon emissions and agricultural production factor prices show environmental Kuznets curve (EKC) characteristics; agricultural carbon emissions and food prices show a U-shaped curve; and agricultural production factors are positively correlated with food price in both directions in the long-term. The results of Granger causality tests show that price is the cause of agricultural carbon emissions; the price of agricultural production factors and the price of food consumption are mutually causal. Such results have implications for price, agriculture, and environmental policies. The analysis implies that the market price can be applied to agricultural carbon reduction, which will help policymakers to implement effective price policies in order to reduce agricultural carbon emissions. One implication is that promoting the marketization of agricultural production factors and reducing price distortions will be conducive to carbon emissions reduction in agriculture, which in turn will increase food consumption prices. Therefore, subsidies are needed at the consumption end, which will eventually achieve further carbon emissions reduction at the production and consumption ends.

Exchange rate appreciation, trade competition and technology transaction: evidence from China

PurposeThe purpose of this study is mainly to investigate the stimulating effect on technology transactions of trade competition resultant from RMB appreciation.Design/methodology/approachThis study uses Chinese provincial panel data from 1998 to 2015 and utilizes GMM method to estimate the stimulating effect of RMB appreciation on technical transactions through trade competition.FindingsThe results demonstrate that RMB appreciation can encourage enterprises to make use of domestic technology market resources for innovation. Specifically, the increase in imports due to the appreciation of RMB can generate technology spill-over and significantly promote technology trade. The export competition resultant from RMB appreciation can also encourage domestic and foreign enterprises to enhance export competitiveness through increased technology transactions.Originality/valueThe current research investigates the impact of exchange rate on independent innovation, but this study demonstrates the influence of exchange rate on technology transactions. In addition, the data in this study cover 1998–2015 in China and thus contributes to determining the effects of exchange rate appreciation in emerging countries.

Does internet development improve green total factor energy efficiency? Evidence from China

Information and communication technology supported by the internet has become an important driving force that promotes the intelligent development of environmental governance in China. Using Chinese provincial panel data for the period 2006–2017, this study investigates whether the internet has improved China's green total factor energy efficiency (GTFEE) using a dynamic spatial Durbin model, mediation effect model and dynamic threshold panel model. The empirical results indicate that the GTFEE has a significant positive spatial correlation. Internet development can not only directly improve local GTFEE but also improve GTFEE in neighboring regions. After accounting for potential endogeneity, this conclusion is still valid. Meanwhile, internet development can indirectly improve regional GTFEE by reducing the degree of resource mismatch while enhancing GTFEE by improving regional innovation capabilities and promoting industrial structure upgrades. In addition, the regression results of the dynamic threshold model show that there is a nonlinear relationship between the influence of the internet development and GTFEE. Specifically, due to an increase in the degree of labor resource mismatch and capital resource mismatch, the impact of the internet on GTFEE has gradually decreased, and this effect has gradually increased with the improvement of regional innovation capabilities and the industrial structure.

Outward FDI, industrial structure upgrading and domestic employment: empirical evidence from the Chinese economy and the belt and road initiative

Does outward foreign direct investment (OFDI) create or diminish jobs in the home country? We develop a theoretical model to study the relation between OFDI and domestic employment and to evaluate the roles that industrial structure upgrading and the Belt Road Initiative (BRI) play therein. Using Chinese provincial panel data during the period 2005–2018, and applying simultaneous equation modelling techniques to control for endogeneity, we find that China’s OFDI presents a significant positive impact on domestic employment, and the BRI moderates this impact positively. As a mediating factor, industrial structure upgrading suppresses employment, but the overall employment impact of OFDI remains positive. We construct panel simultaneous equation models to control for the endogeneity problem caused by simultaneity, and find that our main findings are still supported.

How do environmental regulation and foreign investment behavior affect green productivity growth in the industrial sector? An empirical test based on Chinese provincial panel data

This study investigates the impact of environmental regulations (ERs) and foreign direct investment (FDI) on the green total factor productivity (GTFP) of the industrial sectors in 30 provinces in China by controlling human capital, technological innovation, energy structure, degree of opening up, and ownership structure for the period of 2004–2017. This not only helps to explain the influence path of ERs and FDI on green economic growth, but also effectively measures the moderating effect of ERs on technology spillover from FDI. The purpose of this paper is to explore the relationship between ERs, FDI and industrial GTFP from the perspective of regional heterogeneity, focusing on studying how ERs regulate the impact of FDI on GTFP. By constructing an influence mechanism of ERs and FDI on industrial GTFP, this study employs the feasible generalized least squares (FGLS) model and dynamic generalized method of moments (GMM) model to analyze the effects of ERs, FDI and their cross-terms on GTFP. The empirical results show that (1) the relationship between ERs and GTFP is not linear, but “U”-shaped and China is still in the left half of the “U”-shaped curve; (2) FDI flowing into China has a “pollution heaven” effect on the GTFP in the eastern and central regions while a “pollution halo” effect on the GTFP in the western region; (3) the strengthening of ERs weakens the negative effect of FDI on GTFP and plays a role in “screening” foreign investment; and (4) the spatial heterogeneity could affect the synergistic effect between ERs and FDI. Therefore, it is necessary for China to consider a series of environmental policies to “screen” inward FDI to ensure its move to a green economy benefits its own sustainable development by contributing to the increase in GTFP.

Foreign Direct Investment’s Impact on China’s Economic Growth, Technological Innovation and Pollution

In recent years, China has gradually become one of the countries with the largest levels of foreign direct investment (FDI). FDI has played a significant role in promoting Chinese economic development, and the FDI technology spillover effect is one of the core forces driving China towards reaching new growth milestones. Therefore, due to the country’s interest in development, there is competition for FDI throughout China. However, the existing imperfect environmental protection system cannot prevent FDI from flowing into China’s highly polluting and resource-intensive industrial chain, possibly causing serious environmental problems. Therefore, the topic of properly introducing foreign capital to promote development and effectively end China’s current environmental pollution crisis has become a research focus. To explore FDI’s impact on China’s economic growth, technological innovation, and environmental pollution, we use Chinese provincial panel data for 2004–2016 to construct a dynamic panel simultaneous-equation model. Considering the interrelationships between the equations, we construct economic models of economic growth, technological innovation, and pollution emissions, and incorporate them into the same research system for generalized method of moments (GMM) estimation. Our results show that FDI has a significant and positive direct impact on China’s economic growth and technological innovation, and can furthermore have a significant pull effect on the domestic economy through the backward spillover channel. At the same time, FDI has a direct and significant impact on the increase in regional waste-water discharge, while exhibiting a pollution halo effect on the emission of sulfur dioxide (SO2) and chemical oxygen demand (COD) emissions directly. In addition, we observe “benign feedback mechanism” between technological innovation output and these three types of pollution, namely SO2 emission, COD emissions, and ammonia and nitrogen discharge.

Is the Optimization of Human Capital Structure Improving the Quality of China’s Economic Growth?

Using the 1996-2016 Chinese provincial panel data to measure and analyze the human capital structure and total factor productivity, and empirically examines the impact of human capital structure on high-quality economic growth. The results show that the human capital of higher education promotes the high-quality growth of the economy more significantly, while the human capital of secondary education plays a significant inhibiting role. The heterogeneity study from three regions further shows that the impact of different levels of human capital on the high-quality economic growth of different regions is different. The higher education human capital has a greater role in promoting the high-quality economic growth of the three regions. Basic and secondary education human capital only affects the eastern region.

Institutional Environment and Green Economic Growth in China

As the answer to sustainability concerns, green economic growth has gradually attracted considerable attention. Notably, the optimization of the institutional environment contributes to green economic growth from the perspective of new institutional economics. However, few studies have systematically explained the connection between the institutional environment and green growth. In this study, the institutional environment was divided into three dimensions: governmental, legal, and cultural subenvironments. We adopted econometric models with the effect of every dimension on green growth and empirically analyzed with the generalized method of moments, based on Chinese provincial panel data from the years 2000–2016. The results indicated that there was an inverted U-shaped relationship between China’s institutional environment and its green growth. That is, the institutional environment can initially promote China’s green growth but, if it is not changed, will eventually inhibit it. In addition, the analysis on the three dimensions of the institutional environment highlighted that the role of the cultural subenvironment in green growth is greater than those of the governmental and legal subenvironments.

Does Internet Development Improve Green Total Factor Energy Efficiency? Evidence from China

Information and communication technology supported by the internet has become an important driving force that promotes the intelligent development of environmental governance in China. Using Chinese provincial panel data for the period 2006–2017, this study investigates whether the internet has improved China’s green total factor energy efficiency (GTFEE) using a dynamic spatial Durbin model, mediation effect model and dynamic threshold panel model. The empirical results indicate that the GTFEE has a significant positive spatial correlation. Internet development can not only directly improve local GTFEE but also improve GTFEE in neighboring regions. After accounting for potential endogeneity, this conclusion is still valid. Meanwhile, internet development can indirectly improve regional GTFEE by reducing the degree of resource mismatch while enhancing GTFEE by improving regional innovation capabilities and promoting industrial structure upgrades. In addition, the regression results of the dynamic threshold model show that there is a nonlinear relationship between the influence of the internet development and GTFEE. Specifically, due to an increase in the degree of labor resource mismatch and capital resource mismatch, the impact of the internet on GTFEE has gradually decreased, and this effect has gradually increased with the improvement of regional innovation capabilities and the industrial structure.

Research on green innovation effect of industrial agglomeration from perspective of environmental regulation: Evidence in China

Innovation has been valued as a main driving force of social development, and the need for environmental protection has further raised green innovation development. Previous studies have confirmed that industrial agglomeration has an innovation spillover effect, and furthermore it varies with different agglomeration modes. However, the addition of environmental regulation could exert effects on the innovation spillover of industrial agglomeration. Based on Chinese provincial panel data from 2003 to 2017, this paper tested the effect of different agglomeration modes on green technology innovation (green process innovation and green product innovation) under environmental regulation. Research found that: when industrial agglomeration promotes green technology innovation, environmental regulation will inhibit agglomeration innovation; when industrial agglomeration hinders green technology innovation, environmental planning will promote agglomeration innovation. The regional difference of cluster development are obvious in China, and the effect of agglomeration innovation in different regions is also different. In the implementation of environmental regulation for each region, it is necessary to combine the current situation of cluster development to effectively promote green technology innovation.

The impact of public participation in environmental behavior on haze pollution and public health in China

This study extends the STIRPAT model based on Grossman’s health production function and uses Chinese provincial panel data from 2000 to 2017 to examine regional differences in the impacts of public participation in environmental behavior (PPEB), other socioeconomic factors related to haze pollution, and public health level (PHL) in China. We use four econometric techniques and obtain robust results. Overall, results from the system-GMM indicate that an inverted U-shaped relationship, which has not passed its inflection point, exists between PPEB and haze pollution, PPEB and PHL in the different regions, urbanization, and haze pollution except in the eastern region. Both fossil energy consumption and population density promote haze pollution. Income per capita contributes to haze pollution only in the country as a whole and the western region, but improves PHL in the whole of China and the three regions. There is a negative correlation between haze pollution and PHL in each sample. Medical services are substantially conducive to PHL, except in the western region.

Pollution haven or halo? The role of the energy transition in the impact of FDI on SO2 emissions

This paper explores how the relationship between FDI and SO2 emissions has been affected by the energy transition. We applied a semi-parametric method to a STIRPAT model using Chinese provincial panel data from 2002 to 2016 to conduct an empirical analysis of FDI and SO2 emissions and analyze the effects of FDI on the energy transition. We found that FDI and SO2 emissions are characterized by an inverted U-shaped relationship; FDI and coal consumption have an inverted U-shaped relationship, and FDI and natural gas consumption have a U-shaped relationship. Moreover, the use of coal significantly increases SO2 emissions while the use of natural gas significantly reduces them. Our research shows that technological advances have increased coal consumption and that there has been no reduction of SO2 emissions in China. Overall, our analysis provides mixed support for the pollution haven and pollution halo hypotheses.

Air pollution and income distribution: evidence from Chinese provincial panel data.

In recent years, air pollution has caused an increasing number of problems in China. Individual health and labour productivity, which are affected by air pollution may affect income distribution. Therefore, this article will analyse the effect of air pollution on income distribution. We investigated the evolution of air pollution in China over the past two decades. Fixed-effects and random-effects estimation approaches were used with data from 30 provinces in China from 1998 to 2017 to analyse the effect of air pollution on income distribution. Empirical results reveal that air pollution significantly worsens income distribution in China. Then we explored the mechanism by which air pollution affects income distribution, and found that increasing health expenditures and declining labour productivity mediate the effect of air pollution on income distribution. Considering the potential endogenous problems of air pollution affecting income distribution, the simultaneous equation model and the instrumental variable approach are employed to overcome endogenous bias. Traditional mean regression was empirically found to overestimate the impact of air pollution on income distribution. Finally, some policy implications are proposed to improve air quality and income distribution.

University-industry linkages, regional entrepreneurship and economic growth: evidence from China

ABSTRACT The role of universities, as the cradle for talents and knowledge development, has long been neglected by scholars, especially in emerging economies. In addition, the roles of startups and incumbents, as a channel through which the knowledge could contribute to the economic growth in transition economies, have not been well-explained in extant literature. This paper aims to fill these theoretical and practical gaps by examining the effects of university-industry linkages (including university technology transfer (UTT) and university-industry collaboration (UIC)) and enterprises’ activities (including startups and incumbent competitiveness (IC)) on economic growth in China. Our empirical analysis is based on Chinese provincial panel data from 2003 to 2015. Unlike findings from developed countries, we found that UTT is negatively associated with economic growth in fixed effect and ordinary least squares (OLS), whereas UIC shows no significant impact in fixed-effect but a significant positive effect in OLS. Startups and IC both affect economic growth positively, whereas IC has a greater effect on both estimations. The effects of university-industry linkages and entrepreneurship on economic growth before and after the 2008 financial crisis show heterogeneity. Theoretical and practical implications are discussed in the final section.

Marketisation as a channel of international technology diffusion and green total factor productivity: research on the spillover effect from China’s first-tier cities

ABSTRACT Latecomer technology imitation and learning is an important driving force to enhance their competitiveness and total factor productivity (TFP). This paper constructs green TFP (GTFP) based on the SBM–Global–Luenberger index, using Chinese provincial panel data from 2003 to 2017. The marginal effects of foreign direct investment (FDI), outward foreign direct investment (OFDI), import and export, and intangible and total international technology spillovers (ITS) on GTFP were assessed. These effects were analysed under the influence of absorption capabilities such as research and development intensity, economic and financial, and openness. A spatial diffusion model based on three diffusion sources in China’s first-tier cities, Beijing, Shanghai, and Guangzhou, was constructed to describe the heterogeneous impacts of ITS on GTFP under the marketisation of diffusion sources. We found: (1) ITS based on exports and OFDI promote economic, imports and FDI are relatively small, independent technological innovation is the dominant source of economic growth. (2) Considering spatial diffusion, the contribution of Beijing’s ITS is relatively weak, and Shanghai’s contribution is stronger. Coastal areas have the largest marginal effect of ITS on GTFP, and ITS do not attenuate as geographic distances increase. (3) The market has a multiplier effect, modifying the relationship between ITS and GTFP.