Urbanization, Economic Development, and Ecological Environment: Evidence from Provincial Panel Data in China

Abstract

The relationship between urbanization and the ecological environment is not conclusive in the literature. We used the provincial data from China from 1998 to 2019 to empirically study the relationship between the urbanization ratio and ecological environment which is proxied by the NDVI (normalized difference vegetation index) from the remote sensing data. The results indicate that the coefficient of the interaction between urbanization and per capita GDP is statistically significant and negative (−0.0946), while the coefficient of urbanization itself is very trivial and not statistically significant. It implies that urbanization could reduce ecological quality, particularly for the high-income regions. The higher the urbanization ratio is, the larger the negative impact is. It implies that urban expansion does reduce the ecological environment. The effect of economic development level on the NDVI can be divided into three stages: the one where the NDVI improves with the increase of GDP per capita (urbanization rate of less than 77.59%), the one where the value of the NDVI is not affected by the level of GDP per capita (urbanization rate equal to 77.59%), and the one where the NDVI decreases with the increase of GDP per capita (urbanization rate of more than 77.59%).