The Impact of Foreign Direct Investment on Urban Green Total Factor Productivity and the Mechanism Test.

Abstract

This paper employs the slack-based model directional distance function to measure the green total factor productivity of each city, using the panel data of 284 prefecture-level cities in China from 2004 to 2019 and considering the unexpected output. The results are as follows: ① Foreign direct investment significantly suppresses the improvement of urban green total factor productivity, and the negative impact on the green technology progress index is the main reason to inhibit the increase of the green total factor productivity. The results are still significant through a series of robustness tests such as replacing variables and eliminating outliers; the positive intermediary effect of scientific and technological innovation exists, and the Sobel test and bootstrap random sampling test are passed. The upgrading of industrial structure has a positive regulating effect on the improvement of urban green total factor productivity. ② The impact of foreign direct investment on urban green total factor productivity has regional heterogeneity. The inhibitory effect of foreign direct investment on resource-based cities and non-coastal cities is greater than that on non-resource-based cities and coastal cities, and the negative impact on China-Europe train opening cities is greater than that on non-opening cities. Accordingly, the paper puts forward policy suggestions from the aspects of improving the quality of foreign direct investment and implementing differentiated management.