The industrial sector of China is critical to the country's economic growth. On the other side, industrialisation has resulted in a high rate of emissions, pushing China to spend extensively on industrial pollution remediation. As a result, this study looks at the relationship between investment completed in the treatment of industrial pollution and economic development. Initially, the study used the global Moran's I test (Queen's contiguity matrix) to find spatial autocorrelation for the 'investment completed in the treatment of industrial pollution' factor, where the study found a positive association across Chinese provinces, and suggest the existence of spatial autocorrelation. Thereafter, a time-fixed effect spatial error model was used due to the lowest Akaike information criterion and Bayesian information criterion to analyse regional data of China from 1999 to 2018. The data reveal a positive association between investment completed in the treatment of industrial pollution and regional economic growth, both in the short and long term. Furthermore, the negative consequences of urban wages and foreign investment on investment completed in the treatment of industrial pollution are having the reverse effect on regional green development, necessitating ecologically friendly actions to mitigate the negative environmental effects of both. The results highlight the need for policymakers in other countries to review their plans for economic expansion and create environmentally friendly legislation. By implementing the Chinese green economic growth model, policymakers in industrially polluting nations can reduce industrial pollution and foster green growth in their nation.
Keywords: Financial investment; Green growth; Industrial pollution; Spatial error model; Urban wage.
© 2022. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.