The internal-structural effects of different types of environmental regulations on China's green total-factor productivity

Abstract

Environmental regulation is a crucial tool for promoting green economic development, but how it will affect the internal structure of green economy is unknown. By applying three-hierarchy meta-frontier DEA and panel data from 2001 to 2018, we measured five key internal factors of China's green total-factor productivity (GTFP), i.e., technological innovation, industrial structure, regional balance development, scale, and resource allocation efficiency. On this basis, we examined the internal-structural effects of different types of environmental regulations on GTFP. The results show that there are distinct non-linear relationships (“U” or inverted “U” curve) between different types of environmental regulations and the internal factors of GTFP. And different types of environmental regulations have quite various internal-structural effects on GTFP: (1) the command-and-control regulation can improve GTFP by inducing technological innovation, optimizing industrial structure, improving scale efficiency, and promoting regional coordinated development; (2) the market-based regulation exerts negative effect on GTFP by inhibiting technological innovation and reducing industrial structural, scale, and resources allocation efficiencies. While it has positive effect on regional coordinated development; and (3) the voluntary regulation has negative effect on GTFP mainly by inhibiting technological innovation and regional balance development efficiencies, while it can advance scale efficiency.