Abstract
In this chapter we focus on the relationship between foreign trade and sustainable development in the case of the Chinese regions. Foreign trade may affect pollution outcomes and the environment via various different channels. The first channel is the so-called scale effect that is usually thought of as harmful to the environment, which pertains to the scenario where the expansion of domestic production pressured by increasing trade openness results in more environmental pollution.
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Notes
- 1.
We need to assume that the integral in (6.1) converges for the forecast.
- 2.
Both production functions are increasing, concave and linearly homogeneous.
- 3.
For convenience, we assume that the economy is small in the world market and the government takes the price of good X as given.
- 4.
Or alternatively the government may issue the corresponding marketable pollution quotas that would yield the equilibrium level of pollution tax.
- 5.
The squared terms of the relevant independent variables are also included in the equation in order to take account of potential nonlinear partial effects of these variables as predicted by the EKC framework. The last three terms are the time varying intercept, the time constant regional heterogeneity, and the zero-mean idiosyncratic error term, respectively.
- 6.
In this study, owing to data availability, we choose three types of energy, namely, petroleum, coal, and natural gas for constructing our measure of regional carbon emission based on the formula above. Relevant data needed for the construction can be found in various official publications of the National Bureau of Statistics of China.
- 7.
Statistic significance discussed here in this analysis is at the usual 5Â % level unless otherwise stated.
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Jiang, Y. (2016). Foreign Trade and Sustainable Development. In: Green Development in China. SpringerBriefs in Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-0693-7_6
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DOI: https://doi.org/10.1007/978-981-10-0693-7_6
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