Chinese Geographical Science ›› 2021, Vol. 31 ›› Issue (4): 585-599.doi: 10.1007/s11769-021-1210-z

• Articles •    

The Environmental Impacts of Informal Economies in China: Inverted U-shaped Relationship and Regional Variances

YANG Jiangmin1,2, TAN Yiming1,2, XUE Desheng1,2, HUANG Gengzhi1,2, XING Zuge1,2   

  1. 1. Guangdong Key Laboratory for Urbanization and Geo-Simulation, School of Geography and Planning, Sun Yat-Sen University, Guangzhou 501275, China;
    2. Southern Marine Science and Engineering Guangdong Laboratory, Zhuhai 519082, China
  • Received:2020-06-20 Published:2021-04-29
  • Contact: HUANG Gengzhi;
  • Supported by:
    Under the auspices of the National Natural Science Foundation of China (No. 41930646, 41771137), the Guangdong Academy of Sciences (GDAS) Project of Science and Technology Development (No. 2019GDASYL-0104004), Fundamental Research Funds for the Central Universities (No. 20lgpy31)

Abstract: This paper aims to the debate on the nexus between informal economies and the environment by investigating the long-term dynamic impacts of China’s informal economies on pollution and considering regional differences in informal economies’ pollution. This paper uses the Multiple Indicators Multiple Causes (MIMIC) model to estimate the size of informal economies and employs econometric models to examine their relationships to pollution based on provincial-level panel data from 2000 to 2017. The results indicate that informal economies’ effects on environmental pollution are not purely positive or negative. Rather, our model indicates that there is an inverted U-shaped relationship between informal economies and pollution in the long run in China; this means that the level of environmental pollution increases at first and then decreases with the growth of informal economies. Further analysis shows that while this inverted, U-shaped relationship is significant in different regions of China, it is affected by different environmental impact factors. The paper concludes by discussing the policy implications for environmental protection and sustainable development.

Key words: informal economy, pollution, environmental Kuznets curve, regional variances, sustainable development