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Research on Environmental Regulation and Green Total Factor Productivity in Yangtze River Delta: From the Perspective of Financial Development

Author

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  • Jia Li

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 211106, China
    School of Law and Business, Sanjiang University, Nanjing 210012, China)

  • Decai Tang

    (School of Law and Business, Sanjiang University, Nanjing 210012, China
    School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China)

  • Acheampong Paul Tenkorang

    (School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China)

  • Zhuoran Shi

    (Reading Academy, Nanjing University of Information Science & Technology, Nanjing 210044, China)

Abstract

This paper employs the global Malmquist Luenberger (GML) index and the System Generalized method of moments (GMM) estimation method to investigate the influence of both environmental regulation and financial development on green total factor productivity in 41 cities of the Yangtze River Delta (YRD) in China from 2003–2019. We select the relevant input-output data to measure the green total factor productivity (GTFP) and its decomposition index including undesirable output. The results show that the GTFP and its decomposition index in the YRD have a slow fluctuating upward trend. The YRD mainly depends on improving the level of technological progress and environmental governance to promote the improvement of regional economic green development level. The empirical research results show that there is an inverted U relationship between environmental regulation and GTFP in the YRD, too strict environmental regulation will inhibit the growth of green total factor productivity. By adding control variables, the inflection point of environmental regulation is 0.5034, which is lower than that without control variables. There is a strong interaction and superposition effect between financial development and environmental regulation, which is closely related to the established financial cooperation mechanism, perfect financial system arrangement and cross-regional financial cooperation platform in the YRD. Government intervention should be reduced, the introduction of foreign capital should be controlled appropriately, foreign capital should be guided to green industries, and the use efficiency of foreign capital should be improved. This paper holds that we should pay attention to the strength of environmental regulation, prevent overcorrection, increase the guidance of credit funds, deepen the reform of the financial system, appropriately intervene in the market by the government, strengthen the guidance of foreign capital, and promote the development and transformation of the green economy in the YRD region with the help of several policies.

Suggested Citation

  • Jia Li & Decai Tang & Acheampong Paul Tenkorang & Zhuoran Shi, 2021. "Research on Environmental Regulation and Green Total Factor Productivity in Yangtze River Delta: From the Perspective of Financial Development," IJERPH, MDPI, vol. 18(23), pages 1-24, November.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:23:p:12453-:d:688686
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    Cited by:

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    2. Yang Liu & Yanlin Yang & Huihui Li & Kaiyang Zhong, 2022. "Digital Economy Development, Industrial Structure Upgrading and Green Total Factor Productivity: Empirical Evidence from China’s Cities," IJERPH, MDPI, vol. 19(4), pages 1-23, February.
    3. Xianpu Xu & Xiawan Li & Lin Zheng, 2022. "A Blessing or a Curse? Exploring the Impact of Environmental Regulation on China’s Regional Green Development from the Perspective of Governance Transformation," IJERPH, MDPI, vol. 19(3), pages 1-24, January.
    4. Decai Tang & Zhangming Shan & Junxia He & Ziqian Zhao, 2022. "How Do Environmental Regulations and Outward Foreign Direct Investment Impact the Green Total Factor Productivity in China? A Mediating Effect Test Based on Provincial Panel Data," IJERPH, MDPI, vol. 19(23), pages 1-32, November.
    5. Lei Jiang & Yuan Chen & Bo Zhang, 2023. "Revisiting the Impact of Environmental Regulation on Green Total Factor Productivity in China: Based on a Comprehensive Index of Environmental Regulation from a Spatiotemporal Heterogeneity Perspectiv," IJERPH, MDPI, vol. 20(2), pages 1-17, January.
    6. Xu Dong & Yang Chen & Qinqin Zhuang & Yali Yang & Xiaomeng Zhao, 2022. "Agglomeration of Productive Services, Industrial Structure Upgrading and Green Total Factor Productivity: An Empirical Analysis Based on 68 Prefectural-Level-and-Above Cities in the Yellow River Basin," IJERPH, MDPI, vol. 19(18), pages 1-19, September.
    7. Etienne Inedit Blaise Tsomb Tsomb & Henri Ondoa Atangana, 2023. "Multilateral environmental agreements and the growth of total factor productivity in developing countries: evidence from the foreign direct investment channel," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(11), pages 12965-12997, November.
    8. Yue Zhang & Hui Zhang & Haozhaoxing Liao & Xiang Sun & Lisi Jiang & Yufeng Wang & Yue Wang, 2024. "Heterogeneous Porter Effect or Crowded-Out Effect: Nonlinear Impact of Environmental Regulation on County-Level Green Total Factor Productivity of Pigs in the Yangtze River Basin of China," Agriculture, MDPI, vol. 14(9), pages 1-33, September.
    9. Maohui Ren & Tao Zhou & Di Wang & Chenxi Wang, 2023. "Does Environmental Regulation Promote the Infrastructure Investment Efficiency? Analysis Based on the Spatial Effects," IJERPH, MDPI, vol. 20(4), pages 1-24, February.

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