Financial development and environmental performance: evidence from China

This paper extends the debate on the environmental performance of developing countries by focusing on a new factor. Theoretically, financial development has capitalization, technology, income, and regulation effects on the environment. Using the provincial panel data of China, the econometric analys...

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Bibliographic Details
Published in:Environment and development economics 2011-02, Vol.16 (1), p.93-111
Main Authors: YUXIANG, KARL, CHEN, ZHONGCHANG
Format: Article
Language:English
Subjects:
Air pollutants
China
China (People's Republic)
Control
Credit policy
Developing countries
Ecological sustainability
Econometric analysis
Econometrics
Economic growth
Economics
Economies of scale
Environment
Environmental conservation
Environmental economics
Environmental effects
Environmental impact
Environmental legislation
Environmental performance
Environmental policy
Environmental protection
Environmental regulation
Environmental regulations
Finance
Financial development
Financial services
Focusing
GDP
Government grants
Green businesses
Green economics
Gross Domestic Product
Income
Industrial pollution
LDCs
Linkages
Pollution
Pollution abatement
Public administration
Regional differences
Regulation
Studies
Technology
THEORY AND APPLICATIONS
Water conservation
Water pollution
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Summary:This paper extends the debate on the environmental performance of developing countries by focusing on a new factor. Theoretically, financial development has capitalization, technology, income, and regulation effects on the environment. Using the provincial panel data of China, the econometric analysis provides some evidence of a linkage between financial development and industrial pollution discharges. In recent years, the environmental performance of China has been significantly improved by financial development and some environmental protection schemes. This relationship offers new implications for policy makers in developing countries.
ISSN:1355-770X
1469-4395
DOI:10.1017/S1355770X10000422