Environmental Decentralization, Heterogeneous Environmental Regulation, and Green Total Factor Productivity—Evidence from China

Abstract

The effective enhancement of green total factor productivity (GTFP) through macro-regulatory tools—environmental decentralization and environmental regulation and thus the promotion of high-quality and sustainable economic development—is a hot topic of current research. However, many studies have focused on how environmental decentralization or environmental regulation affects green total factor productivity, lacking attention to the relationships and impact paths among the three. To clarify the mechanisms of action of the three effects, this paper measures the GTFP of 30 Chinese provinces and cities from 2010 to 2020 through the Super-SBM model. The mediating effect of environmental regulation between environmental decentralization and GTFP is examined. Firstly, the study findings suggested that environmental decentralization is significantly negatively related to GTFP, while different environmental regulations are all significantly positively related to GTFP. Secondly, environmental decentralization suppresses GTFP in eastern China, which has a non-significant effect in central China. It has a catalytic effect on GTFP in western China. Finally, environmental decentralization can enhance GTFP by promoting public participation in environmental regulation. The findings of this paper have implications for adjusting environmental decentralization, environmental regulation policies, and formulating green economic transition and development strategies.