Economic Growth, Urbanization and Air Pollution in China: An Empirical Research Based on Panel Data

Abstract

This paper analyzes the relationship between economic growth, urbanization level and air pollution based on a panel dataset compromising 27 provinces and 4 municipalities in China. Fixed effect models are used with time fixed-effect dummies and individual fixed-effect dummies included in the regression models. The estimation results show that an inverted U-shaped relationship between economic growth and air pollution exists, supporting the EKC hypothesis, although the turning points vary greatly among air pollutants. However the non-linear relationship between the urbanization level and air pollution is not clearly identified according to the results. Furthermore, some other variables included as control variables in the regression models also have effects on the air pollution.