The impact of economic and financial activities on air quality: a Chinese city perspective
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RESEARCH ARTICLE
The impact of economic and financial activities on air quality: a Chinese city perspective Nguyen Phuc Canh 1
&
Wei Hao 2 & Udomsak Wongchoti 3
Received: 17 June 2020 / Accepted: 11 October 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This study examines the impact of economic and financial activities on air pollution in China using prefecture-level panel data from 2004 to 2015. Recruiting the air quality index (AQI) as a measure of overall air quality in Chinese cities, we find that industrial production, financial development, and economic integration lead to higher overall air pollution. Nevertheless, efficiency in urban planning through public transportation and population density alleviates this environmental degradation. A closer look into the two main air pollutants in China, sulphur dioxide and dust, further highlights the complexity of the issue. We find that trade openness reduces both sulphur dioxide and dust emissions, whereas financial development reduces sulphur dioxide emissions but increases dust in Chinese cities. Our findings are of particular interest to policymakers when devising environmental policies in support of sustainable economic development. Keywords Air pollution . City . China . Industrial development . Economic integration JEL code Q53 . Q54 . Q56 . F18 . F64
Introduction Economic development and economic growth have been the ultimate goals of all countries since the middle of the last century. However, attention to the environment rarely appeared on country agendas. Rapid growth in economic activity has been accompanied by adverse impacts on global ecology and humanity. At the United Nations Conference on the Responsible Editor: Eyup Dogan * Nguyen Phuc Canh [email protected] Wei Hao [email protected] Udomsak Wongchoti [email protected] 1
School of Banking, University of Economics Ho Chi Minh City, 59C Nguyen Dinh Chieu, District 3, Ho Chi Minh City 700000, Vietnam
2
School of Economics and Finance, Massey University, Wellington, New Zealand
3
School of Economics and Finance, Massey University, Palmerston North, New Zealand
Human Environment held in Stockholm in 1972, the relationship between economic development and environmental degradation was put on the international agenda for the first time. Since then, the concepts of ‘environment protection’ and ‘sustainable development’ have become increasingly important to all countries around the world. A most noticeable form of environmental degradation is the problem of air pollution. According to the World Health Organization (WHO 2019), there are 4.2 million deaths every year due to exposure to ambient (outdoor) air pollution. Air pollution has been highlighted as the world’s top killer by the World Economic Forum (WEF 2018a). The severe problem of air pollution has attracted vast attention from academic researchers. A summary of recent literature (2011–2019) on air pollution is provided in Table 7 in the Appendix. To determine what anthropogenic (humancaused) facto
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