Abstract This paper builds simultaneous equations model between economic growth and environmental regulation to test the relationship between the two from 1996 to 2010. The results show that there is a single way causal relationship between economic growth and environmental regulation according to the overall level of data. A two-way causality is found in China's economically developed regions. While no causal relationship between the two is found in less developed regions. Although different regions show different relationships between the economic growth and environmental regulation, the interaction in term of human capital and economic growth in the economically developed regions and less developed regions have a significant positive effect on environmental regulation.
2012, Vol. 1 
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