How Environmental Regulations Affect Green Total Factor Productivity—Evidence from Chinese Cities

Abstract

Environmental pollution and resource waste in Chinese cities have become important obstacles to sustainable economic development, and it is urgent to change the mode of economic development and improve the quality of economic development. In response to this challenge, this study proposes environmental regulation as a solution and empirically tests the impact of environmental regulation on green total factor productivity. The empirical results show that environmental regulation can significantly improve urban green total factor productivity, the public environmental concern and green finance strengthen the positive effect of environmental regulation on urban green total factor productivity. The mechanism test shows that environmental regulation can improve urban green total factor productivity through green technological innovation and industrial structure upgrading. Heterogeneity analysis reveals that, compared to the resource-based cities, the positive effect of environmental regulation on urban green total factor productivity is more significant in the non-resource-based cities with relatively developed traditional finance and high levels of industrial modernisation. Compared to the central and western as well as the northeast regions of China, the positive effect of environmental regulation on urban green total factor productivity is more significant in the eastern region due to capital accumulation and technological constraints. The results of the study remain reliable after a series of endogeneity and robustness tests. These studies provide an important research basis for providing more targeted environmental regulation programmes and better improving green total factor productivity.

Impact of Forest City Selection on Green Total Factor Productivity in China under the Background of Sustainable Development

“…Secondly, the mechanism analysis of this paper shows that the implementation of China's forest city policy a positive impact on the growth of urban green total factor productivity, mainly through increasing the urban ecological space area, attracting the concentration of labor resources and promoting the progress of green technology. This research result is consistent with previous studies on the change of green total factor productivity in Chinese cities under resource and environmental constraints [44], indicating that forest city, as an environmental regulation policy [45], not only directly affects the urban ecological space area, but also influences the green technology innovation of enterprises in the city to improve the green total factor productivity of the city [46]. However, this paper also found some new influence mechanisms, for example, the positive ecological benefits generated by forest cities can improve the living environment of urban residents, thus attracting high-quality talents, which has not been deeply discussed in previous studies.…”