Discussion Paper

No. 2016-43 | November 02, 2016
Does Corruption Matter for the Environment? Panel Evidence from China


This paper examines the income-energy-SO2 emissions nexus by taking a corruption variable into account. To that end, the panel cointegration methods are applied to 29 Chinese provinces over 1999–2012. The authors´ empirical evidence shows that an increase in the number of anti-corruption cases tends to drive down SO2 emissions in China. It is also found that income growth appears to have a beneficial effect on decreasing SO2 emissions over the past two decades. Finally, energy consumption is found to increase SO2 emissions.

JEL Classification:

C23, Q56


  • Downloads: 1726


Cite As

Xianchun Liao, Eyup Dogan, and Jungho Baek (2016). Does Corruption Matter for the Environment? Panel Evidence from China. Economics Discussion Papers, No 2016-43, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2016-43

Comments and Questions

mouna GAMMOUDI - Comments
November 03, 2016 - 21:34

I find the question the paper is trying to ask and its findings very interesting, however, I have some remarks as detailed below:

1-No explanations are given why the authors consider the specific 29 Chines provinces in their analysis. What provinces are included? What makes ...[more]

... them interesting? Why other provinces are not considered?

2-In the concluding Remarks authors write “we take into a corruption variable into account in a dynamic panel model when estimating the income-energy-SO2 emissions nexus”. Did you used a dynamic panel? I don’t understand this phrase.

3- - The paper does not provide enough details about empirical methodology, it is important to include a paragraph where you explain the empirical methodology

Jungho Baek - Responses
November 10, 2016 - 03:15

1. China has 23 provinces, 4 municipalities directly under the central government, 2 special administrative regions and 5 autonomous regions, totally 34. Because the data from Tibet autonomous region, Taiwan Province, Macao Special Administrative Region, Hong Kong Special Administrative Region cannot be obtained, the 4 regions are excluded. Although Chongqing ...[more]

... municipality was established in 1997, there is lack for some variables in some years for this city and its all data are incorporated in Sichuan Province. Thus, the number of remaining provinces are 29. This will be added in the revised manuscript as suggested.
2. The panel cointegration method would be more appropriate for the phrase. This will be taken care of in the revised manuscript. Thank you very much!
3. Thank you very much for your suggestions and comments. We will include a paragraph to explain the empirical methodology in the revised version of our paper.

WANG ZIFENG - good paper
November 08, 2016 - 10:44

This paper's topic is interesting and very important to China. I have no more questions on this paper.

Jungho Baek - Thank-You
November 10, 2016 - 03:16

Thank you for your positive comments.

Wei Geng - Great paper
November 09, 2016 - 02:37

This topic is interesting. It is meaningful and provides insights not only for China, but also for developing countries with similar circumstances. It is a great paper in terms of research questions, methodology, results and policy implications. I am OK with this paper.

Jungho Baek - Thank-You
November 10, 2016 - 03:17

We truly appreciate your positive comments.

Zanxin Wang - Interesting
November 10, 2016 - 08:32

This paper's topic is interesting. The methodology is widely used in economics. The results provide insights on China's sustainable development. Overall, the article being reviewed is straightforward and contributes to the knowledge in literature.

Anonymous - Thank-You
November 14, 2016 - 03:52

We appreciate your positive comments. Thank you very much!

Anonymous - Referee report
February 23, 2017 - 08:45

1. The research is not well motivated. For instance, the authors are advised to conduct more analysis about the affecting mechanisms.

2. The authors should conduct an independent literature review as a section.

3. I cannot see the contribution of the paper, such as topic, methods or new ...[more]

... findings.

4. The results can be further enriched.

5. Overall, the paper seems still very rough.

Anonymous - Objection
February 23, 2017 - 12:13

The report is quite short and comments are very general not directly related to this paper at all (It seems the reviewer posted the report without reading the paper).

Anonymous - Referee Report
May 26, 2017 - 09:22

This paper studies an important question - whether corruption impacts the environment - which has the potential to make a significant contribution. The question has been studied in some contexts, but there is significant room for new insight to be drawn if such an analysis is done well. However, the ...[more]

... methods employed in this paper are not particularly useful or sufficient for filling these gaps in the literature. The authors gather data to create a panel but then do not employ well-known modern econometrics techniques that could allow for either stronger inference or causal inference. For example, instead of using cointegration methods, I would strongly urge the authors to consider using standard panel fixed effects methods and finding suitable instruments for an instrumental variables estimator that could remove the bias associated with the endogeniety of bribery. Furthermore, the authors do not consider the economics literature on how corruption impacts the environment closely enough, and the paper would benefit from more insight into what gaps in the literature the paper can truly address. If the main contribution is that the question is now studied in the China context, then perhaps the authors could explain what new things we learn more generally from studying the China context.

Overall, I like the topic of this paper and applaud the authors for identifying an important research question. However, there is still significant room for improvement in regards to employing modern econometrics methods to answer the question.

Jungho Baek - Responses to the Referee's Comments
July 21, 2017 - 23:42

Our responses to the referee's comments are attached.

Anonymous - Responses to the Referee’s Comments
July 21, 2017 - 23:48

As required, a pdf file is attached.

Anonymous - this study is loo loose
June 06, 2017 - 17:27

The topic of this paper is interested and I was attracted by the title of this paper. However, I feel disappointed after reading it.
The main weakness of this manuscript:
1. This paper is loosely writing without citing rigorous literature evidence or information source. This can NOT be accepted ...[more]

... for professional academic writing.
P1 “The World Bank estimates that the direct cost of air pollution - such as acid-rain damage to crops, medical bills and job-loss from illness - ranges between 8 percent and 12 percent of China’s GDP annually .“ There is no citation source!

P3: "The findings from these studies generally show that there is the ambiguous evidence in favor of the EKC for China, and strong evidence that China’s growth in energy consumption indeed causes environmental degradation. " Please cite the studies!
This manuscript should be written rigorously with sufficient and specific literature and evidence.

2. The methodology is not rigorous.
On "2.1 The model to be estimated", “we extend the so-called standard model of the income-energy-environment nexus to include a measure of corruption. “ Why this model is justified? There could many other omitted variables..... The dataset is on provincial, but the test model does not control for many other provincial characteristics.

"The number of anti-corrupt cases is used as a measure of the degree of corruptibility" How did the authors collect and count the numbers of corruption? This is not clear in the paper. Also, the statistics of the corruption cases reported may be seriously biased due to political reasons.

On P5 “ Given that numerous studies commonly show the crucial role of income plays in influencing environmental outcomes, it would be proper to directly test the Environmental Kuznets Curve (EKC) hypothesis into our modeling. “
Please cite the representative ones of "numerous studies"

3. There is no descriptive statistics. Table 1 starts to report the results.

Jungho Baek - Responses to the Anonymous Comments
July 21, 2017 - 23:46

See the attached file.