Industrial Characteristics, Environmental Regulations and Air Pollution in a Developing Country: An Analysis of the Chinese Manufacturing Sector

This paper examines and quantifies the complex linkages between industrial activity, environmental regulations and air pollution in China. We utilize a little used dataset of Chinese industry specific emissions for a variety of pollutants between 1996 and 2003. Our analysis allows us to investigate the role played by different determinants of emissions intensity. We find pollution intensity to be a positive function of physical and human capital intensity. Conversely, we find pollution intensity to be a negative function of the productivity of an industry and the industry’s expenditure on capital and R&D. Our results also indicate that regulations, both formal and informal, have been successful in reducing the pollution intensity of Chinese industries. JEL Classification: O13, L60, Q21, Q25, Q28