Economic growth and the environment in China: Empirical evidence using prefecture level data

- This paper addresses the issue of the relationship between economic growth and environmental quality represented by air pollution and water pollution in China.
- The main hypothesis to be examined in the study is the environmental Kuznets curve hypothesis, which postulates an inverse U-shaped relationship between pollutions and income.
- The empirical analysis uses prefecture level panel data of China over the period 2003-2010, and employs fixed effects model and a sample split method.
- The empirical results tend to confirm the inverse U-shaped relationship as well as the N-shaped relationship between income and pollution.

This paper addresses the issue of the relationship between economic growth and environmental quality in China. The main hypothesis to be examined in the study is the environmental Kuznets curve hypothesis, which postulates an inverse U-shaped relationship between pollutions and income. The empirical analysis uses prefecture level panel data of China over the period 2003-2010, and employs fixed effects model and a sample split method. The empirical results tend to confirm the inverse U-shaped relationship as well as the N-shaped relationship between income and pollution.