The positive role of trade openness in industrial green total factor productivity-provincial evidence from China.

Abstract

The sustainable development of the economy is a key issue of global concern. Green total factor productivity (GTFP) combining economic growth with resources and the environment can evaluate the quality of economic development comprehensively and accurately. In this paper, super slack-based measure (Super-SBM) model and Malmquist-Luenberger (ML) index were used to calculate GTFP. The trend of industrial GTFP in China's 30 provinces from 2006-2015 was analyzed. Furtherly, a dynamic panel model was used to discuss the impact of trade openness on GTFP. The results showed that (1) the growth rate of GTFP rose from 2007 to 2011 and declined significantly from 2011 to 2015, and GTFP only achieved positive growth in 2011; (2) the growth rate of GTFP in the eastern region was higher than that in the central and western regions; (3) the trend of technical progress change (MLTECH) index was highly consistent with that of ML index. That was, technical progress played a major role in the variation of GTFP; (4) trade openness could significantly improve China's GTFP. Every 1% increase in trade openness could increase GTFP by 0.097% on average. It is advisable to implement differentiated economic development and environmental policies in different regions. Meanwhile, relevant measures can be taken to promote import and export trade, such as encouraging companies to increase investment in green technology research and development, optimizing the trade environment.