Re-Examination of the Relationship between Agricultural Economic Growth and Non-Point Source Pollution in China: Evidence from the Threshold Model of Financial Development

The coordinated development of agricultural economic growth and non-point source (NPS) pollution is an important task in enhancing pollution prevention. Significantly, agricultural economic growth and NPS pollution are interrelated, and their mechanism will be affected by financial development. For this reason, the current study established a panel smooth transformation regression (PSTR) model to reveal the mechanical evolution under different financial development levels. It was found that the impact of agricultural economic growth on NPS pollution was significantly positive in the low level of financial development, which is manifested as an "intensification effect". Fortunately, when the level of financial development reaches the medium and high thresholds, agricultural economic growth will inhibit agricultural NPS pollution. At the same time it was also found that the impact of agricultural economic growth on NPS pollution is manifested as an "inhibition effect" at the overall level, but presenting significant structural differences. Specifically, the impact on the eastern and central regions of China is manifested as an "inhibition effect", whereas the impact in the western region of China is characterized as an "intensification effect". Finally, the elasticity analysis showed that the influence of financial development on agricultural NPS pollution was significantly positive, and that its intensification effect is ubiquitous.