The Influence Study on Environmental Regulation and Green Total Factor Productivity of China’s Manufacturing Industry

Green development is the theme of the current era. Environmental regulation is an essential means to achieve environmental benefits and improve the total green factor productivity of manufacturing facing a series of problems brought by the development model of “high investment, high pollution, and high consumption.†Appropriate environmental regulations need to be implemented to achieve economic and environmental harvest. Based on the panel data of 25 manufacturing industries from 2003 to 2016 in China, this thesis constructs a comprehensive indicator of environmental regulation and calculates the green total factor productivity, and its decomposition applied SBM directional distance function and Malmquist–Luenberger productivity index. Besides, this thesis conducts an empirical analysis of environmental regulation’s effect on green productivity in China. The main conclusions showed that the green total factor productivity of China’s manufacturing industry maintains an upward trend on the whole, and the growth of GTFP mainly depends on technological progress rather than the improvement of technical efficiency. The great differences have significant industrial heterogeneity characteristics of GTFP. A single threshold in the whole manufacturing industry, environmental regulation, and GTFP of industries are shown to be “U shape,†and the left of the inflection point is not significant. Environmental regulations and GTFP of moderation and slightly pollution industries are “U shape,†and there is no nonlinear relationship between environmental regulation intensity and GTFP in light pollution industries. Therefore, the government’s optimal environmental regulation intensity should be implemented according to the industry’s heterogeneity to prevent the phenomenon of “ineffective regulation;†it is necessary to pay attention to both technological innovation and technical efficiency.