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The Guiding Opinions on Accelerating the Establishment of a Sound Economic System with Green, Low-Carbon, and Circular Development, released by the State Council of China in 2021, highlights the importance of harmonizing high-quality development and advanced environmental preservation efforts. Its objective is to establish an economic system that fosters green, low-carbon, and circular development, thereby guaranteeing the realization of carbon peak and carbon neutrality objectives. This strategic undertaking seeks to propel China’s green development to unprecedented heights. Evidently, “green” is a crucial direction for contemporary and future economic development. For evaluating the effectiveness of economic development, most researchers widely acknowledge and employ the total factor productivity (TFP) indicator, derived from input-output calculations, as proposed by Solow (1956). Chung et al. (1997) first introduced “undesirable” outputs, including environmental pollution, in the TFP measurement, and referred to it as green total factor productivity (GTFP). The GTFP indicator considers ecological environment and natural resources when assessing economic benefits, making it an effective measure for high-quality economic development (Chen, 2010). An enhanced GTFP is an outcome of harmonized socioeconomic, resource, and environmental development. Embracing a development approach guided by GTFP can fuel robust momentum for achieving high-quality economic growth. Finding pathways to enhance GTFP, while considering the unique characteristics of regional resource endowments, is an urgent and crucial matter that requires considerable attention.
In studies examining the factors influencing GTFP, some researchers utilized fixed effects models to empirically demonstrate that regional coordinated development (Liu et al., 2020) and green credit (Liu et al., 2023) can promote the enhancement of GTFP in China. He and Qi (2022), utilizing a two-way fixed effects approach, also demonstrated that environmental regulations (ERs) exhibit a reverse “u-shaped” impact on GTFP through effects such as innovation compensation and energy allocation. Wang et al. (2020) utilized advanced statistical methods such as generalized least squares and random effects models. Their findings indicate a substantial positive impact of technological innovation on GTFP. Based on panel data from Chinese firms, Sun et al. (2022) used the ordinary least squares method. Their findings indicate that green innovation by firms has a positive impact on GTFP.
Furthermore, researchers employed epsilon-based measure data envelopment analysis (Yang et al., 2020) and Tobit regression models (Xiao, 2021), and demonstrated the positive impact of human capital (HUM) on the efficiency of GTFP. Several researchers utilized spatial Durbin models to empirically demonstrate that digital finance (Yu et al., 2022; Zhu & Zhang, 2022) and diversified industrial structures (Ye & Xiao, 2023) can contribute to the enhancement of local city-level GTFP, while also generating significant positive spatial spillover effects. Using the geographically and temporally weighted regression model, researchers empirically demonstrated the significant promoting effects of digital development (Zhao et al., 2022), innovation investment, and urbanization level on the growth of China’s GTFP. However, scholars also observed that industrial clusters and patent applications have a dampening effect on GTFP (Xiao, 2022).
Cui and Lin (2019) utilized propensity score matching and difference-in-differences and found that the introduction of foreign direct investment contributes positively to the enhancement of firm-level GTFP. However, Xu et al. (2021), employing fixed effects models, and Dong and Xia (2022), utilizing the generalized method of moments estimation, discovered a negative correlation between foreign direct investment and China’s GTFP, providing empirical support for the “pollution haven” hypothesis. In addition, several researchers employed threshold (Han et al., 2017), mediation effect (Xie et al., 2021), and panel smooth transition regression (Wang et al., 2022) models to analyze and suggest that the enhanced marketization is instrumental in driving the enhancement of GTFP levels across different regions in China.