Environmental Regulation, Resource Misallocation, and Ecological Efficiency

ABSTRACT

This study presents an ecological efficiency analysis by combining the potential of every area in China in terms of emissions reduction and energy savings with resource allocation. Changes in ecological efficiency are calculated. Environmental regulation and resource misallocation factors are introduced to identify key factors influencing ecological efficiency. The results indicate a U-shaped relationship between provincial relative environmental regulation strength and resource misallocation degree, where regulation could relieve resource misallocation somewhat and improve ecological efficiency. However, after the curve’s turning, ecological efficiency deteriorates. The study expands the research boundary of economics and ecology and provides a reference for policy-makers.

KEY WORDS:

• ecological efficiency
• ecological footprint
• environmental regulation
• spatial error model

JEL CLASSIFICATION:

• Q56
• Q38
• Q57

Acknowledgments

This work was supported by Major Projects in Philosophy and Social Science Research of the Ministry of Education of China under [Grant No. 14JZD031]; the National Natural Science Foundation of China under [Grant Nos. 71471001 & 71601170]; Projects in Philosophy and Social Science Research of the Ministry of Education of China under [Grant No. 16YJC630123]; Project of China Scholarship Council [Grant No. 201806335011]

Notes

^1. The “Five-Year Plan” is China’s central government’s short-term plan for its national economic and social development. The plan is updated once every five years. The “11^th Five-Year Plan” refers to the plan for the development of the national economy from 2006 to 2010 in China.

^2. In China, state-owned enterprises include not only enterprises where the central government invests or participates in their control but also enterprises that are controlled by local government investment.

^3. In China, non-state-owned enterprises refer to enterprises with no more than 50% of government holdings, including township enterprises, individual private enterprises, and foreign-funded enterprises, among others.

^4. The eastern region includes Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, Guangxi, and Hainan.

The central region includes Shanxi, Inner Mongolia, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, and Hunan.

The western region includes Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Ningxia, Qinghai, and Xinjiang.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [71471001 & 71601170].