The Relationship between Environmental Regulation and Green Total Factor Productivity in China: An Empirical Study Based on the Panel Data of 177 Cities

Abstract

Promoting the coordinated development of industrialization and the environment is a goal pursued by all of the countries of the world. Strengthening environmental regulation (ER) and improving green total factor productivity (GTFP) are important means to achieving this goal. However, the relationship between ER and GTFP has been debated in the academic circles, which reflects the complexity of this issue. This paper empirically tested the relationship between ER and GTFP in China by using panel data and a systematic Gaussian Mixed Model (GMM) of 177 cities at the prefecture level. The research shows that the relationship between ER and GTFP is complex, which is reflected in the differences and nonlinearity between cities with different monitoring levels and different economic development levels. (1) The relationship between ER and GTFP is linear and non-linear in different urban groups. A positive linear relationship was found in the urban group with high economic development level, while a U-shaped nonlinear relationship was found in other urban groups. (2) There are differences in the inflection point value and the variable mean of ER in different urban groups, which have different promoting effects on GTFP. In key monitoring cities and low economic development level cities, the mean value of ER had not passed the inflection point, and ER was negatively correlated with GTFP. The mean values of ER variables in the whole sample, the non-key monitoring and the middle economic development level cities had all passed the inflection point, which gradually promoted the improvement of GTFP. (3) Among the control variables of the different city groups, science and technology input and the financial development level mainly had positive effects on GTFP, while foreign direct investment (FDI) and fixed asset investment variables mainly had negative effects.

Research on Environmental Regulation and Green Total Factor Productivity in Yangtze River Delta: From the Perspective of Financial Development

“…Equation (6) adds the secondary term of environmental regulation to Equation (5) to test whether there is a nonlinear relationship between environmental regulation and green total factor productivity [ 35 , 36 , 37 , 38 , 39 , 40 , 41 ]. The results show that the primary term coefficient is positive, and the secondary term is negative, and both pass the 1% significance level test, indicating that environmental regulation can promote the development of regional green economy.…”

“…Environmental regulation can effectively promote industrial green transformation by improving green total factor productivity. Lei [ 37 ], Zhao [ 38 ] also found that environmental regulation has a nonlinear impact on green total factor productivity. The research results show that different types of environmental regulations have different effects on the green total factor productivity of different polluting industries, and the green total factor productivity of heavily polluting industries is in an inverted U shape [ 39 ].…”

Environmental Regulation and Green Total Factor Productivity: Evidence from China's Marine Economy

“…Owing to the importance of green development of the marine economy, we examine the impact of environmental regulation on the GTFP of marine economy. Existing studies have discussed regional GTFP [32], industrial GTFP [33,34]. However, few existing studies have explored the GTFP of the marine economy.…”

Modeling the Impact of Innovation on Economic Quality and Environmental Pollution Change under Consideration of Environmental Regulation

“…In this situation, green total factor productivity (GTFP) has become the main driving force and quantitative standard for driving China's economic development [2]. In practice, scholars have conducted a series of discussions on the improvement paths of GTFP, focusing on government systems [3], technological development [4], foreign trade [5], and financial development [6]. Among them, the role of environmental regulation in the improvement of GTFP has aroused heated discussion in academic circles.…”