Trade openness, environmental regulation, and human capital in China: based on ARDL cointegration and Granger causality analysis.

This research aims to examine the empirical cointegration, long-run and short-run dynamics, and causal relationships between trade openness, environmental regulation, and human capital level in China throughout 1990-2016. Based on the ARDL Bounds Testing method, the empirical results confirmed long-run cointegration between trade openness, environmental regulation, and human capital level. Environmental regulation and trade openness have a significant positive impact on the human capital level, and environmental regulation has a U-shaped effect on human capital accumulation. The Granger causality test results indicate that environmental regulation Granger causes human capital level, the human capital level Granger causes trade openness, and trade openness and environmental regulation have a bidirectional relationship. This research brings new contributions to sustainable development theory.