Assessing China's development zones and carbon emissions.

ABSTRACT

The present article evaluates establishment of development zones and its association with carbon emissions. In the process of industrialization, carbon emissions in underdeveloped regions of the world increase with economic growth. In order to promote economic growth in the western region and strengthen the management of enterprise pollution emissions, the Chinese government has set up hundreds of development zones. Existing research shows that development zone establishment can promote economic growth; however, literature is scarce when the relationship is tested across region. Based on the panel data of five provinces with relatively backward economy in western China from 2001 to 2017, this paper constructs a "multi-period difference-in-difference" (DID) model with the establishment of development zones as a "quasi-natural experiment" to test the relationship. Findings reveal that development zone establishment increases carbon emissions in the region, and has a significant inhibitory effect on carbon emissions at national level. The conclusions of this paper provide empirical evidence and policy implications for reducing carbon emissions in economically underdeveloped areas.