The relationship between China's income inequality and transport infrastructure, economic growth, and carbon emissions

Abstract

Since the beginning of the 21st century, accompanied by the tremendous achievements of China's economic growth is an increasingly severe income gap between the rich and the poor. Based on panel data from 2000 to 2018, this study systematically examined the relationship among transport infrastructure, economic growth, carbon emissions, and income inequality in China, using the panel vector autoregressive model estimated by the generalized method of moments. We further divided China into three regions to investigate the regional heterogeneity of these relationships. The results show a long‐run equilibrium relationship between transport infrastructure, economic growth, carbon emissions, and income inequality. Income inequality in the previous year significantly affects that in the current year positively. Whether at the national or regional level, economic growth affects income inequality negatively. For the national sample, the highway reduces income inequality, while the railway increases income inequality. For both the subsamples and the national sample, carbon emissions significantly increase income inequality and are the Granger test cause for income inequality. Furthermore, we discuss some of the possible mechanisms of these results. Our findings generate policy implications for reducing income inequality in regard to economic growth, transport infrastructure, and carbon emissions.

Effect of economic development, income inequality, transportation, and environmental expenditures on transport emissions: evidence from OECD countries

“…Consequently, long run has larger impact transport-carbon emission rather than short run. Former studies (e.g., Song 2021 ; Poi et al 2021 ; Feng et al 2021 ; Zhang and Zhang 2021 ) also confirm our findings that income inequality negatively associated with carbon emissions. However, their research concentrates merely on total carbon dioxide emissions rather than specific sector.…”

“…This suggests that income inequality stimulates the economic activities, because, small portion of income is possessed by a few people or entities, which can be invested in productive projects within or across the countries. Moreover, higher income class has the potential to innovate new technology related to transport by spending on research and development concern over environmental quality (Hussain et al 2021 ; Wang et al 2020a , b , c ; Zhang and Zhang 2021 ; Yan and Yang 2021 ). The short-run outcomes also confirm income inequality is negatively associated with transport-carbon emissions across the OECD countries.…”

“…Moreover, economies adopt advanced technologies that increase the income level and improve productivity and environmental quality (Zhang and Zhang 2021 ; Liobikiene and Butkus 2019 ; Ahmad et al 2020 ). Besides, income inequality also affects the carbon emission.…”

“…This strand of the literature sheds light on the relationship between economic development and environment. Several studies, e.g., Zhang and Zhang ( 2021 ), argued that level of economic development has remarkable impact on carbon emissions in inclination trend. In the contrast, income inequality is negatively associated with carbon emissions through marginal propensity to consume concern over consumers.…”

How Does Income Inequality Influence Environmental Regulation in the Context of Corruption? A Panel Threshold Analysis Based on Chinese Provincial Data

“…They found that income inequality significantly promotes direct CO 2 emissions under all quantile levels, and the impact on indirect CO 2 emissions is not significant. Zhang and Zhang [15] found that there is a long-run positive relationship between income inequality and carbon emissions in China.…”