Going Green or Going Away? A Spatial Empirical Examination of the Relationship between Environmental Regulations, Biased Technological Progress, and Green Total Factor Productivity

Abstract

China’s economic development has resulted in significant resource consumption and environmental damage. However, technological progress is important for achieving coordinated economic development and environmental protection. Appropriate environmental regulation policies are also important. Although green total factor productivity, environmental regulations, and technological progress vary by location, few studies have been conducted from a spatial perspective. However, spatial spillover effects should be taken into consideration. This study used energy consumption, the sum of physical capital stock and ecological service value as total capital stock, the number of employed people as inputs, sulfur dioxide emissions as undesired outputs, and green GDP as total output to obtain green TFP through a slacks-based measure (SBM) global Malmquist-Luenberger Index. This study also estimated China’s biased technological progress under environmental constraints from 2004 to 2015 based on relevant data (e.g., green GDP, total capital stock, and employment figures). The relationship between green total factor productivity (GTFP), technological progress, and environmental regulation was then examined using a spatial Durbin model. Results were as follows: (1) Based on the complementary elements, although the labor costs gradually increase, the rapid accumulation of capital leads to technological progress that is biased toward capital. However, technological progress in the labor bias can significantly increase GTFP. (2) There is a u-shaped relationship between existing environmental regulations and GTFP. Technological progress can significantly promote GTFP in the surrounding areas through existing environmental regulations. (3) Under spatial weight, the secondary industry coefficient was negative while human capital stock and FDID had positive effects on GTFP. Technological progress is the source of economic growth. It is therefore necessary to promote biased technological development and improve labor-force skills while implementing effective environmental regulation policies.

Environmental Regulation, Environmental Commitment, Sustainability Exploration/Exploitation Innovation, and Firm Sustainable Development

“…In the long-term, however, environmental regulation can increase firm performance through improving the efficiency of environmental innovation [13]. This difference between short-term and long-term perspectives triggers the effect of environmental regulation on firm performance to be not significant with another reason that there is still a lack of broad environmental regulation practices in China compared to developed countries [86].…”

Green Biased Technical Change in Terms of Industrial Water Resources in China’s Yangtze River Economic Belt

“…Some researches study the green biased technical change in China. Among them, Wang et al [10] estimate China's biased technical change under environmental constraints from 2004 to 2015, finding that although the rapid accumulation of capital leads to technical progress that is biased toward capital, technical progress in the labor bias can significantly increase green total factor productivity. Jiang et al [11] split the industry performance into economic and environmental dimensions, finding that technical and scale inefficiencies are relatively higher for environmental sub-technology compared to the economic sub-technology in China.…”

Green Governance and International Business Strategies of Emerging Economies’ Multinational Enterprises: A Multiple-Case Study of Chinese Firms in Pollution-Intensive Industries

“…Some scholars have researched the mechanism and implementation of green governance, and they have pointed out that open innovation activities can effectively deal with the externalities of resources and facilitate sustainable development [1,[31][32][33]. Some scholars have indicated the importance of green institutional contexts [34,35]. However, a widely accepted definition of green governance is still lacking.…”