Green Total Factor Productivity Growth Research Articles

Quantifying the Impact of Urban Sprawl on Green Total Factor Productivity in China: Based on Satellite Observation Data and Spatial Econometric Models

Worsening environmental effects caused by the rapid large-scale urban expansion in most Chinese cities is a worrying trend. In response, China is advocating an economic transition from rapid (raw growth) to a high-quality development model that incorporates negative environmental consequences. Green total factor productivity (GTFP) is regarded as one of the important approaches for measuring high-quality development. Hence, the aim of this research is to quantify the impact of urban sprawl on GTFP using remote sensing data and spatial econometric models. The primary findings of this study are as follows. (1) The urban sprawl index presents a decreasing trend from 2005 to 2016, indicating that urbanization has slowed; (2) The GTFP scores of Chinese cities are not randomly distributed and thus present significant spatial spillovers; and (3) The results of spatial lag models reveal that spatial spillover of GTFP is significant and positive. In other words, increases in GTFP in neighboring cities promotes GTFP improvements in nearby cities. We also find that the impact of urban sprawl on GTFP is significant and negative, indicating that rapid urban expansion is a contributor to decreased GTFP growth in China. Moreover, urban sprawl has a negative effect on technical change and efficiency change. The main findings can provide policy makers in Chinese cities with scientific foundations to design and implement effective measures to improve GTFP.

A new Malmquist-type green total factor productivity measure: An application to China

China's GDP has shown a swift rate of increase over the past forty years, and rapid economic development has also brought serious environmental problems. This research is based on green total factor productivity (GTFP) combined with the sound characteristics of the Malmquist and Luenberger indices, and by defining technical efficiency in terms of the orientation-distance function, a new model of the green Malmquist productivity index is recommended. GTFP is extended to the framework of the Malmquist index. We also break down this new Malmquist productivity index (MPI) into the three factors of efficiency changes, pure technology changes, and scale efficiency changes. The empirical application studies 30 Chinese provinces during the period between 2007 and 2017 as the tested sample. The estimated result shows that GTFP in China is on the rise, but the GTFP growth rate is decreasing, mainly due to a slowdown in the rate of technical progress. Furthermore, the empirical study also finds a significant difference among the eastern, central, and western regions of China.

An Empirical Study on the Impact of Foreign Direct Investment on Green Total Factor Productivity

In order to study the impact between Foreign Direct Investment (FDI) and Green Total Factor Productivity (GTFP), this work first introduces the concepts of FDI and GTFP and the impact mechanism between them. Then, the calculation method of GTFP is explored. According to the influencing factors, the impact model of FDI on GTFP is constructed. Finally, the influence degree coefficients of each influencing factor are calculated through experiments, and the influencing factors and influence degree of FDI on GTFP are obtained. The results show that the parameter of domestic research and development (R&D) capital investment is the largest, reaching 11.47, which is significant at 1%. It indicates that the growth of GTFP is most affected by domestic R&D capital investment, and the two are positively correlated. The research on the influencing factors of FDI on GTFP is of practical significance to the growth of GTFP under the influence of FDI.

Green Total Factor Productivity and Its Saving Effect on the Green Factor in China's Strategic Minerals Industry from 1998-2017.

Improving green total factor productivity (GTFP) is a fundamental solution to help the strategic mineral industry to achieve green and sustainable development. This study incorporates the dual negative externalities of resource depletion and environmental pollution into the GTFP measurement to capture the 'green' elements. By employing a truncated third-order (TTO) translog cost function and the feasible generalized least squares (FGLS) approach, we evaluate the GTFP growth performance and its components in China's strategic minerals industry from 1998 to 2017. Moreover, we explore the bias of technological progress toward the resource and environmental factors to grasp the green factor saving effects. The results show that: (1) during the sample period, the average GTFP growth rate of China's strategic minerals industry was 0.46%, but there were variances between mineral sectors. Nevertheless, after 2012, the GTFP of all mineral sectors experienced different degrees of decrease. (2) The main driver of adjustments in GTFP growth shifted from technological progress to changes in scale efficiency, with technological progress contributing less to GTFP growth. This is particularly evident in the metal and energy minerals sectors. (3) Green technological progress is biased toward saving environmental factor input but enhancing resource extraction. Therefore, the current development of China's strategic minerals industry falls into a non-sustainable mode of being environmentally friendly but not resource-saving.

Green Growth, Carbon Intensity Regulation, and Green Total Factor Productivity in China

Based on input-oriented Malmquist productivity index and parametric decomposition approach, this paper measures China’s green total factor productivity (TFP) index and its growth sources using a panel dataset of 30 provinces of China mainland from 1997 to 2014, and assesses the effect of CO2 intensity regulation on the green TFP growth in China. The results show that the green TFP has been growing at a yearly averaged rate of -1.51% during this period. The results also indicate that the policy of CO2 intensity regulation does not generate significant effect on the green total factor productivity of China’s provinces when using the two stage least squares (2SLS) estimator to control for the potential endogeneity biases. On the other hand, there exists significant heterogeneity in the effect of the CO2 intensity regulation on the green TFP of China’s provinces. Specifically, the CO2 intensity regulation promotes the green development performance of provinces in the eastern area, while it does not generate obvious impacts on the green TFP of provinces in both central and western areas.

Do large cities have a productivity advantage in China? From the perspective of green total factor productivity growth

Green total factor productivity (GTFP) under resource and environmental constraints is becoming increasingly important. This study constructed a new productivity indicator to calculate urban GTFP growth and identify whether large cities have an advantage. The Dagum Gini coefficient was combined to reveal the difference in GTFP growth among cities of different sizes, and urban GTFP growth was decomposed from the perspective of elements and technology. In addition, an econometric model was used to test the effects of city size on the GTFP growth and its decompositions. The results show an increasingly significant GTFP growth advantage in large cities, mainly due to technical progress, scale-mix efficiency growth, technical leadership effect, input utilization efficiency growth, expected output efficiency growth, and unexpected output governance efficiency growth. Notably, the econometric model shows that after controlling some external factors, the growth rate of urban GTFP still increases with the expansion of city size, which proves that large cities have an obvious productivity advantage. However, the sources of GTFP growth advantages of large cities no longer include scale-mix efficiency growth and input utilization efficiency growth. This study's conclusion has significant theoretical and practical implications for promoting the coordinated development of large, medium and small cities. Classification codeC813, F061.2.

Measurement of China's Green Total Factor Productivity Introducing Human Capital Composition.

In the face of resource and environmental problems caused by extensive economic development, China has put forward a green development strategy. Scientific measurement and analysis of green total factor productivity (GTFP) is of great significance for achieving high-quality economic development. By introducing the human capital composition, including education, health, scientific research, and training, this paper study adopts the Slack Based Measure-Global Malmquist-Luenberger (SBM-GML) index to re-measure the GTFP and its decomposition of 30 provinces, municipalities, and autonomous regions in China from 2000 to 2019. The results show that: (1) China’s GTFP has a fluctuating growth trend, with an average annual growth rate of 2.31%. (2) In terms of its decomposition, technical progress is the main force driving GTFP growth, with a contribution rate of 1.59%; the improvement of technical efficiency is a secondary driving force, with a contribution rate of 0.71%. (3) The measurement results of GTFP, considering the human capital composition, are generally higher than those without consideration, and the GTFP growth under the two modes shows a trend of “high in the east and low in the west”. The conclusions have enlightening significance for improving GTFP and the growth potential of the economy in China.

Digital economy and its spatial effect on green productivity gains in manufacturing: Evidence from China

The digital economy is driving a new round of technological innovation and industrial transformation. This study estimates the level of China's digital economy by adopting the entropy approach and calculates the growth of green total factor productivity (GTFP) in China's manufacturing industry by applying the Luenberger-Hicks-Moorsteen (LHM) indicator and considering by-production (BP) technology. The results show that China's digital economy and GTFP of manufacturing have been growing steadily. Manufacturing industry GTFP growth has been significantly enhanced by the digital economy, and digital economy levels in the surrounding areas have significant spatial spillover effects on green productivity growth. Moreover, the green growth of manufacturing industry in the western region is faster than that in the central and eastern regions. The digital economy's spillover effects on the manufacturing industry are more evident in the western region. The findings of this study offer empirical evidence on the role the digital economy plays in fostering sustainable growth in China's manufacturing sector.

Transportation infrastructure, economic agglomeration and non-linearities of green total factor productivity growth in China: Evidence from partially linear functional coefficient model

Previous studies have not clarified how transportation infrastructure will affect green total factor productivity. In this paper, we examine the impact of transportation infrastructure on green total factor productivity in Chinese cities with varying levels of economic agglomeration. We find that when the degree of economic agglomeration is relatively low, the effect of transportation infrastructure on green total factor productivity change is not obvious, but with a higher degree of agglomeration, this effect becomes evident. We thus recommend that the construction of transportation infrastructure may help the government achieve its goal of green and sustainable transformation, but the degree of economic agglomeration should be increased to beyond the critical level in order to make the impact of transportation infrastructure beneficial.

Spatial Econometric Study on the Impact of Industrial Upgrading on Green Total Factor Productivity

Under the background of high-quality development led by the new development concept in China, it is imperative to change the development mode, optimize the economic structure, and transform the driving force, and industrial upgrading is the necessary way to promote the optimization of the industrial structure and achieve high-quality economic development. Based on data covering 284 prefecture-level cities in China, this paper first calculates the green total factor productivity (GTFP) of each prefecture-level city and then constructs three spatial econometric models (SLM, SEM, and SDM) based on four spatial weight matrices to empirically analyze the impact of industrial upgrading on GTFP. The results show that the GTFP of all cities in China shows a fluctuating upward trend and significant spatial spillover effect. Both full-sample and regional heterogeneity tests show that industrial upgrading can promote growth in GTFP, but the promoting effect on different regions is different. Regarding the control variables, GTFP has an inverted U-shaped relationship with economic development; additionally, human capital and financial development play a driving role in GTFP, while population density plays a restraining role. Finally, based on the empirical findings, we propose a multipronged policy of differentiated industrial policy and a variety of complementary measures to promote GTFP growth.

Study on Relationship between Environmental Regulation and Green Total Factor Productivity from the Perspective of FDI—Evidence from China

The existing literature has paid less attention to the key role of FDI in the realization of Porter’s hypothesis. Based on China’s provincial panel data from 2007 to 2020, this paper uses the SBM function and the Luenberger productivity index to measure the green total factor productivity (GTFP) of China’s provinces while considering energy consumption and undesired output. Using FDI as the mediating variable and threshold variable, this paper studies the relationship between environmental regulation (ENV), FDI, and GTFP. The research results show that: (1) There is a U-shaped relationship between ENV and GTFP. China is currently on the left side of the U-shaped inflection point. Further improving the intensity of ENV can promote the growth of GTFP. (2) The mediating effect of FDI is significantly established. ENV and FDI show a significant U-shaped relationship. Further development of FDI can promote GTFP. (3) FDI has a threshold effect. When FDI is at a low level of development, ENV and GTFP are negatively correlated and insignificant; when FDI is at a high level of development, ENV can significantly promote the growth of GTFP. The marginal effect on green TFP increases with FDI growth. The results of this paper show that FDI is a necessary prerequisite for the Porter hypothesis to become a reality in China. The research of this paper has important reference value for realizing the sustainable development of environment, economy, and society.

Towards green economy: Environmental performance of belt and road initiative in China.

As a Chinese solution to build a community of human destiny, Belt and Road Initiative (BRI) has shown China's international responsibility by promoting its green development. Based on the annual panel data of Chinese cities from 2004 to 2018, this paper systematically explores the effect of BRI on the Green Total Factor Productivity (GTFP) of cities along its domestic route using the difference-in-differences (DID) method. The results of the study show that (1) BRI significantly increases the GTFP of cities along its domestic route, and this finding holds after excluding a series of robustness tests such as endogeneity issues and other policy disturbances. (2) BRI promotes the growth of GTFP in the region mainly through improving science and technology innovation, increasing foreign direct investment and enhancing trade cooperation. (3) From the perspective of heterogeneity, the promotion effect of BRI on the GTFP of inland cities along the route is much higher than that of coastal cities, and cities along the route with stronger environmental concerns have a more significant enhancement effect. (4) Based on the policy context and the undertaking of role functions, there is a significant positive linkage effect between BRI Initiative and the Free Trade Zone (FTZ) construction in promoting GTFP growth. (5) From a spatial perspective, BRI has not only increased the GTFP of cities along the route, but also radiated the growth of GTFP in neighboring cities along the route. The conclusion of this paper provides a policy reference and theoretical basis for further building the green "Belt and Road" and promoting the sustainable development of China's economy and high-quality transformation.

The relationship between policy adjustment of SO2 emissions charge standard and the growth of green total factor productivity—Evidence from China

Evaluating the impact of environmental pollution charge system reform is necessary to help formulate a suitable policy to achieve a goal of emission control. The paper examines the relationship between policy adjustment of SO2 emissions charge standard (PSC) and urban growth of green total factor productivity (GGTFP) using a natural experiment data of 280 cities in China. The results indicated that the improvement of SO2 emissions charge standard can reduce emission and promote the GGTFP. Furthermore, it reveals an “N” relationship between the policy time period and the GGTFP, and an “Inverted-U” relationship between policy intensity and the GGTFP. The results imply that there is some policy room for policy makers to set a shadow price of pollution charge to maximize policy effect, and it is also important to consider the policy effect in the implementation time and intensity to maximize the policy effect and resource efficiency for the GGTFP and sustainable development.

Fiscal Decentralization, Export Technology Complexity and Regional Green Total Factor Productivity: Empirical Study based on GML Productivity Index

With the Global-Malmquist-Luenberger (GML) productivity index, we calculate and evaluate the Chinese green total factor productivity and the decomposition, and further take the dynamic GMM method to empirically study the effect of export sophistication, fiscal decentralization and their interaction terms on regional green total factor productivity. The increasing export technology complexity has a significant effect on the regional green total factor productivity growth. Increasing export sophistication degree means the improving status of international vertical specialization division and upgrading of export product structure, which has a positive incentive effect on adoption of regional environmental technology and transformation and upgrading of regional industrial structure. However, this effect will be disturbed by the regional fiscal decentralization. Fiscal decentralization intensifies local government’s competition and distorts local factor market and resources misallocation. It will not only distort the incentive of enterprises to increase less technology and the R&D on the export of products, but also will inhibit the upgrading process of regional industrial structure, which would lead to extensive growth trap of “high consumption and high emission”. To continue to enhance China's position in the international division of labor is necessary. Moreover, a diversified evaluation system is encouraged in the performance evaluation system of local officials to optimize the resources allocation efficiency, and propose a proper guidance and incentive for local enterprises to promote industrial transformation and upgrading. Ultimately a win-win situation between ecological civilization construction and economic sustainable growth is achieved.

The effect of social sphere digitalization on green total factor productivity in China: Evidence from a dynamic spatial Durbin model

Digitalization has been the new engine of development that drives the regional economy, but scant empirical studies investigate the linkage between the social sphere digitalization and green total factor productivity (GTFP). Based on the quantitative and comprehensive index of digitalization development, the study calculates the digital economy from the social sphere in China's 279 cities between 2011 and 2019. Besides, the impact of social sphere digitalization on GTFP is examined using the dynamic spatial Durbin model (SDM). The basic results show that the development of the digital economy in the social sphere positively influences the growth of GTFP, and there is a spatial spillover effect. Specifically, the 1% increase in social sphere digitalization will bring a 0.0705% increase in GTFP. Furthermore, influencing mechanisms of the digital economy on GTFP are examined, namely industrial structure upgrading, human capital, and technological invention effects. Last, the heterogeneity analyses show that the influencing intensity is different in Eastern, Middle, and Western cities as well as in resource-based and non-resource-based cities. Our findings provide new evidence for the relationship between the social sphere digitalization and green development, and also give managerial implications for other cities or countries that are seeking energy and emission-reduction measures.

Understanding the Green Total Factor Productivity of Manufacturing Industry in China: Analysis Based on the Super-SBM Model with Undesirable Outputs

Total factor productivity (TFP) is considered a source of economic growth, and as the constraints of climate change and energy security gradually increase, green total factor productivity (GTFP) is also included in the meaning of the topic. In this study, we combine the super-SBM model with the GML index and include undesirable outputs to measure the GTFP of 26 manufacturing sub-sectors in China from 2004 to 2017. The results show that in the sample period, the GTFP growth rate of China’s manufacturing continues to accelerate, and the driving force is mainly from green technological progress change (GTC), while the green technical efficiency change (GEC) generally declines. After entering the 13th Five-Year Plan period, GEC also began to show a growth trend. The acceleration of green technological progress and the improvement of green technical efficiency jointly drove the GTFP of China’s manufacturing industry to enter a rapid upward trajectory during the 13th Five-Year Plan period, with an average annual growth rate of 5.16%. In addition, different categories of China’s manufacturing industry have begun to develop in a different manner in recent years, which is mainly caused by the difference in the growth rate of green technological progress in the manufacturing industry. Specifically, the GTFP growth rate of equipment and high-tech manufacturing is the highest, followed by consumer goods manufacturing and energy-intensive manufacturing. Accordingly, this paper suggests that the manufacturing industry should further increase investment in R&D, optimize resource allocation, and formulate differentiated policies for different industries, so as to improve the GTFP of the manufacturing industry and promote the green and low-carbon transformation of China’s manufacturing industry.

Different types of industrial agglomeration and green total factor productivity in China: do institutional and policy characteristics of cities make a difference?

This paper applies panel data of 281 prefecture-level cities in China from 2004 to 2017 to calculate the green total factor productivity (GTFP) at the city level. Then, it examines the influences of various forms of industrial agglomeration on GTFP and its two decomposition factors. The results demonstrate that the agglomeration of the manufacturing industry rather than producer services can effectively improve the GTFP of cities mainly through stimulating internal technological progress. However, the collaborative agglomeration of manufacturing and producer services has a significant positive correlation with GTFP. In addition, the heterogeneity analysis shows that for cities with institutional and policy advantages, collaborative agglomeration can play a more substantial effect. But, for ordinary cities, manufacturing agglomeration is more beneficial to furthering the growth of GTFP.

Spatial Differences and Influencing Factors of Industrial Green Total Factor Productivity in Chinese Industries

Based on the perspective of energy and carbon emission constraints, this paper measures and decomposes the green total factor productivity (GTFP) of China’s industries from 2003 to 2018. By applying the GTWR model, this paper also identifies the factors driving GTFP and spatial and temporal heterogeneity. The results show that (1) China’s industrial GTFP exhibits a dynamic “growth-steady-growth-decline” trend. The growth rate in eastern China is much higher than that in other regions. Technological progress is found to be the main factor contributing to GTFP growth. (2) The regional differences in GTFP are widening over time. The Gini coefficient of industrial GTFP increased year by year in the eastern and western regions, while the difference between the central and western regions showed a narrowing trend. The difference between the northeast region and other regions showed a tremendous variation. (3) We explore the spatial and temporal differences in the factors influencing the growth of industrial GTFP in China in four dimensions: factor inputs, technological progress, structural factors, and market environment. Innovation investment, urbanization level, and FDI have strong promotion effects on GTFP growth in the eastern, central, and western regions. The marginal impact of environmental governance to promote GTFP growth weakens gradually. Industrial enterprise clustering, patent application, and technology introduction exert inhibiting effects on industrial GTFP in the eastern, central, and western regions. GTFP growth in the northeast region mainly relies on capital investment and the dividend of market-oriented reform. The impact of financial support on industrial GTFP in each region turned from positive to negative after 2014. Finally, based on the spatial and temporal differences in the growth of industrial GTFP, this paper proposes some specific strategies and paths to promote the coordinated development of regional industries.

Exports as a new paradigm to connect business and information technology for sustainable development

With efficient and effective access to information technology, exports could be the best solution for businesses to tackle climate change through “learning by exporting” for sustainable development. With this context as reference, this study uses the directional distance function and the Malmquist–Luenberger Productivity Index (MLPI) to analyze the “green” total factor productivity (GTFP) growth of exporting firms in India by comparing them with non-exporting firms from 2012 to 2020. The finding reveals that, on average, GTFP growth is higher for the exporting firms (7.9%) as compared to non-exporting firms (-0.7%)—the “learning by exporting” effect exists in India, and exports could help Indian firms tackle climate change. Moreover, the decomposition of the MLPI shows that technical change (TC) is the main driver of GTFP in both exporting and non-exporting groups—IT or technological innovation leads to an increase in environmental productivity. Furthermore, the Tobit model is used to analyze the main drivers of TC that promote the GTFP in both groups. The results show that the product innovation (0.61%) has exerted a remarkable positive effect on promoting the GTFP of exporting firms and the human capital quality (0.57%) in non-exporting firms. Based on these findings, we propose that Indian policymakers “prudently” implement more field-oriented or performance-oriented policies for firms through promotional policies, such as tax incentives, while also encouraging the adoption of innovative technology for more effective mitigation of climate change for sustainable development.

Green total factor productivity in Chinese cities: Measurement and causal analysis within a new structural economics framework

The driving force of high-quality development is to improve the total factor productivity. This paper examines this issue at the city level in China. First, input–output data are reconstructed, and then the green total factor productivity (GTFP) index of 264 Chinese cities during 2003–2018 is accounted based on the SBM-DDF-ML index under data envelopment analysis (DEA). The accounting results show distinctively temporal, regional, and city-scale heterogeneity in urban GTFP growth. Second, the analysis of the causal factors of urban GTFP growth in the framework of the new structural economics verifies the theoretical inference that structural factors not only lead to disparities in macroeconomic growth, but are also a key reason underlying heterogeneities in urban GTFP. Specifically, industrial comparative advantage based on resource endowments mainly works by optimizing the efficiency of resource allocation to enhance pure efficiency change, and its dynamics will also generate demand for technological progress to promote pure technological progress. Moreover, a mismatch between industrial structure and resource endowment structure is not conducive to improvements in urban productivity improvement, but the contemporaneous introduction of more advanced technologies can help reduce or even reverse this negative effect.