IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v24y2022i12d10.1007_s10668-021-02032-5.html
   My bibliography  Save this article

Analyzing the impact of local government competition on green total factor productivity from the factor market distortion perspective: based on the three stage DEA model

Author

Listed:
  • Juan Tang

    (Xinjiang University)

  • Fangming Qin

    (Xinjiang University)

Abstract

This study explores the effect and internal mechanism of local government competition on green total factor productivity (GTFP) from the factor market distortion perspective. A three stage data envelopment analysis (DEA) model was applied to measure the GTFP of 30 provinces from 2008 to 2017. Furthermore, this study analyzes the influence of local government competition and factor market distortions on GTFP using the spatial Durbin model (SDM) and mediation effect model. The statistical results reveal that the spatial correlation of GTFP is significant across Chinese provinces. The growth of GTFP is significantly inhibited by local government competition that can indirectly restrict its improvement through factor market distortions. Regional heterogeneity indicates that in the eastern and central regions, local government competition does not significantly inhibit GTFP growth. Additionally, local government competition failed to restrain the improvement in GTFP through factor market distortion. Moreover, in the western region, local government competition inhibited the growth of GTFP by causing factor market distortion.

Suggested Citation

  • Juan Tang & Fangming Qin, 2022. "Analyzing the impact of local government competition on green total factor productivity from the factor market distortion perspective: based on the three stage DEA model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 14298-14326, December.
    • Handle: RePEc:spr:endesu:v:24:y:2022:i:12:d:10.1007_s10668-021-02032-5
    DOI: 10.1007/s10668-021-02032-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-021-02032-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-021-02032-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Deng, Zhongqi & Jiang, Nan & Song, Shunfeng & Pang, Ruizhi, 2021. "Misallocation and price distortions: A revenue decomposition of medical service providers in China," China Economic Review, Elsevier, vol. 65(C).
    2. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    3. Li, Ke & Lin, Boqiang, 2016. "Impact of energy conservation policies on the green productivity in China’s manufacturing sector: Evidence from a three-stage DEA model," Applied Energy, Elsevier, vol. 168(C), pages 351-363.
    4. Cees Withagen & Alex Halsema, 2013. "Tax competition leading to strict environmental policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 434-449, June.
    5. López, Ramón & Galinato, Gregmar I. & Islam, Asif, 2011. "Fiscal spending and the environment: Theory and empirics," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 180-198, September.
    6. Loren Brandt & Trevor Tombe & Xiadong Zhu, 2013. "Factor Market Distortions Across Time, Space, and Sectors in China," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 39-58, January.
    7. Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October.
    8. Grassmueck, Georg, 2011. "What Drives Intra-county Migration: The Impact of Local Fiscal Factors on Tiebout Sorting," The Review of Regional Studies, Southern Regional Science Association, vol. 41(2,3), pages 119-138, Fall, Win.
    9. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June.
    10. Zhang, Jinning & Wang, Jianlong & Yang, Xiaodong & Ren, Siyu & Ran, Qiying & Hao, Yu, 2021. "Does local government competition aggravate haze pollution? A new perspective of factor market distortion," Socio-Economic Planning Sciences, Elsevier, vol. 76(C).
    11. Haufler, Andreas & Maier, Ulf, 2019. "Regulatory competition in capital standards: a ‘race to the top’ result," Journal of Banking & Finance, Elsevier, vol. 106(C), pages 180-194.
    12. Wallace E. Oates & Wallace E. Oates, 2004. "Fiscal Decentralization and Economic Development," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 21, pages 377-383, Edward Elgar Publishing.
    13. Wang, Shuhong & Zhao, Danqing & Chen, Hanxue, 2020. "Government corruption, resource misallocation, and ecological efficiency," Energy Economics, Elsevier, vol. 85(C).
    14. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    15. David M. Konisky, 2007. "Regulatory Competition and Environmental Enforcement: Is There a Race to the Bottom?," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 853-872, October.
    16. Justin Yifu Lin & Zhiqiang Liu, 2000. "Fiscal Decentralization and Economic Growth in China," Economic Development and Cultural Change, University of Chicago Press, vol. 49(1), pages 1-21.
    17. Wheeler, David, 2001. "Racing to the bottom : foreign investment and air pollution in developing countries," Policy Research Working Paper Series 2524, The World Bank.
    18. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
    19. Faguet, Jean-Paul, 2014. "Decentralization and Governance," World Development, Elsevier, vol. 53(C), pages 2-13.
    20. Walter Leal Filho & Abul Quasem Al-Amin & Gustavo J. Nagy & Ulisses M. Azeiteiro & Laura Wiesböck & Desalegn Y. Ayal & Edward A. Morgan & Paschal Mugabe & Marilyn Aparicio-Effen & Hubert Fudjumdjum & , 2018. "A Comparative Analysis of Climate-Risk and Extreme Event-Related Impacts on Well-Being and Health: Policy Implications," IJERPH, MDPI, vol. 15(2), pages 1-19, February.
    21. Yang, Mian & Yang, Fuxia & Sun, Chuanwang, 2018. "Factor market distortion correction, resource reallocation and potential productivity gains: An empirical study on China's heavy industry sector," Energy Economics, Elsevier, vol. 69(C), pages 270-279.
    22. Kunce, Mitch & Shogren, Jason F., 2007. "Destructive interjurisdictional competition: Firm, capital and labor mobility in a model of direct emission control," Ecological Economics, Elsevier, vol. 60(3), pages 543-549, January.
    23. H. Fried & C. Lovell & S. Schmidt & S. Yaisawarng, 2002. "Accounting for Environmental Effects and Statistical Noise in Data Envelopment Analysis," Journal of Productivity Analysis, Springer, vol. 17(1), pages 157-174, January.
    24. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    25. van der Kamp, Denise & Lorentzen, Peter & Mattingly, Daniel, 2017. "Racing to the Bottom or to the Top? Decentralization, Revenue Pressures, and Governance Reform in China," World Development, Elsevier, vol. 95(C), pages 164-176.
    26. Jianxin Wu & Yanrui Wu & Bing Wang, 2018. "Local Government Debt, Factor Misallocation and Regional Economic Performance in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(4), pages 82-105, July.
    27. Yiping Huang & Kunyu Tao, 2010. "Factor Market Distortion and the Current Account Surplus in China," Asian Economic Papers, MIT Press, vol. 9(3), pages 1-36, Fall.
    28. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April.
    29. Liangliang Liu & Donghong Ding & Jun He, 2019. "Fiscal Decentralization, Economic Growth, and Haze Pollution Decoupling Effects: A Simple Model and Evidence from China," Computational Economics, Springer;Society for Computational Economics, vol. 54(4), pages 1423-1441, December.
    30. Jin, Gang & Shen, Kunrong & Li, Jian, 2020. "Interjurisdiction political competition and green total factor productivity in China: An inverted-U relationship," China Economic Review, Elsevier, vol. 61(C).
    31. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    32. Yang, Zhenbing & Shao, Shuai & Fan, Meiting & Yang, Lili, 2021. "Wage distortion and green technological progress: A directed technological progress perspective," Ecological Economics, Elsevier, vol. 181(C).
    33. Song, Malin & Du, Juntao & Tan, Kim Hua, 2018. "Impact of fiscal decentralization on green total factor productivity," International Journal of Production Economics, Elsevier, vol. 205(C), pages 359-367.
    34. Ouyang, Xiaoling & Wei, Xiaoyun & Sun, Chuanwang & Du, Gang, 2018. "Impact of factor price distortions on energy efficiency: Evidence from provincial-level panel data in China," Energy Policy, Elsevier, vol. 118(C), pages 573-583.
    35. Michael Rauscher, 2005. "Economic Growth and Tax-Competing Leviathans," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 457-474, August.
    36. Xufeng Su & Xiaodong Yang & Jinning Zhang & Jinling Yan & Junfeng Zhao & Jianliang Shen & Qiying Ran, 2021. "Analysis of the Impacts of Economic Growth Targets and Marketization on Energy Efficiency: Evidence from China," Sustainability, MDPI, vol. 13(8), pages 1-17, April.
    37. Wu, Haitao & Hao, Yu & Ren, Siyu & Yang, Xiaodong & Xie, Guo, 2021. "Does internet development improve green total factor energy efficiency? Evidence from China," Energy Policy, Elsevier, vol. 153(C).
    38. Yu Chen & Anthony G. O. Yeh & Yingxuan Zhang, 2017. "Political tournament and regional cooperation in China: a game theory approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 597-622, May.
    39. Barrett, Scott, 1994. "Strategic environmental policy and intrenational trade," Journal of Public Economics, Elsevier, vol. 54(3), pages 325-338, July.
    40. Costas Hadjiyiannis & Panos Hatzipanayotou & Michael S. Michael, 2014. "Cross-border pollution, public pollution abatement and capital tax competition," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(2), pages 155-178, March.
    41. Shi, Xunpeng & Sun, Sizhong, 2017. "Energy price, regulatory price distortion and economic growth: A case study of China," Energy Economics, Elsevier, vol. 63(C), pages 261-271.
    42. Tan, Ruipeng & Lin, Boqiang & Liu, Xiying, 2019. "Impacts of eliminating the factor distortions on energy efficiency—A focus on China's secondary industry," Energy, Elsevier, vol. 183(C), pages 693-701.
    43. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
    44. Jene K. Kwon & Hoon Paik, 1992. "Factor Price Distortions, Resorce Allocation, and Growth: A Computable General Equilibrium Analysis," Korean Economic Review, Korean Economic Association, vol. 8, pages 191-213.
    45. Fredriksson, Per G. & Millimet, Daniel L., 2002. "Strategic Interaction and the Determination of Environmental Policy across U.S. States," Journal of Urban Economics, Elsevier, vol. 51(1), pages 101-122, January.
    46. Dierkes, Maik & Germer, Stephan & Sejdiu, Vulnet, 2020. "Probability distortion, asset prices, and economic growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 84(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Long Qian & Yunjie Zhou & Ying Sun, 2023. "Regional Differences, Distribution Dynamics, and Convergence of the Green Total Factor Productivity of China’s Cities under the Dual Carbon Targets," Sustainability, MDPI, vol. 15(17), pages 1-26, August.
    2. Fan, Min & Zhou, Yun & Lu, Zhixi & Gao, Sen, 2024. "Fintech's impact on green productivity in China: Role of fossil fuel energy structure, environmental regulations, government expenditure, and R&D investment," Resources Policy, Elsevier, vol. 91(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Jinning & Wang, Jianlong & Yang, Xiaodong & Ren, Siyu & Ran, Qiying & Hao, Yu, 2021. "Does local government competition aggravate haze pollution? A new perspective of factor market distortion," Socio-Economic Planning Sciences, Elsevier, vol. 76(C).
    2. Zhu, Qingyuan & Xu, Chengzhen & Chen, Qingjuan & Wu, Liangpeng, 2024. "Oil price distortion and its impact on green economic efficiency in China’s transportation: A spatial effect perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    3. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    4. Ru Sha & Tao Ge & Jinye Li, 2022. "How Energy Price Distortions Affect China’s Economic Growth and Carbon Emissions," Sustainability, MDPI, vol. 14(12), pages 1-27, June.
    5. Gao, Kang & Yuan, Yijun, 2022. "Does market-oriented reform make the industrial sector “Greener” in China? Fresh evidence from the perspective of capital-labor-energy market distortions," Energy, Elsevier, vol. 254(PA).
    6. Wang, Jian & Wu, Qun & Yan, Siqi & Guo, Guancheng & Peng, Shangui, 2020. "China’s local governments breaking the land use planning quota: A strategic interaction perspective," Land Use Policy, Elsevier, vol. 92(C).
    7. Qiao, Sen & Zhao, Dong Hao & Guo, Zi Xin & Tao, Zhang, 2022. "Factor price distortions, environmental regulation and innovation efficiency: An empirical study on China's power enterprises," Energy Policy, Elsevier, vol. 164(C).
    8. Ran Tao & Fubing Su & Mingxing Liu & Guangzhong Cao, 2010. "Land Leasing and Local Public Finance in China’s Regional Development: Evidence from Prefecture-level Cities," Urban Studies, Urban Studies Journal Limited, vol. 47(10), pages 2217-2236, September.
    9. Jiangfeng Hu & Xiaofang Zhang & Tingting Wang, 2022. "Spatial Spillover Effects of Resource Misallocation on the Green Total Factor Productivity in Chinese Agriculture," IJERPH, MDPI, vol. 19(23), pages 1-23, November.
    10. Han, Chao & Tian, Xian-Liang, 2022. "Less pollution under a more centralized environmental system: Evidence from vertical environmental reforms in China," Energy Economics, Elsevier, vol. 112(C).
    11. Jiang, Weijie & Li, Yidong, 2023. "Effect of fiscal decentralization on pollution reduction: Firm-level evidence from China," Economic Modelling, Elsevier, vol. 129(C).
    12. Sailian Xia & Daming You & Zhihua Tang & Bo Yang, 2021. "Analysis of the Spatial Effect of Fiscal Decentralization and Environmental Decentralization on Carbon Emissions under the Pressure of Officials’ Promotion," Energies, MDPI, vol. 14(7), pages 1-21, March.
    13. Levinson, Arik, 2003. "Environmental Regulatory Competition: A Status Report and Some New Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(1), pages 91-106, March.
    14. Yu, Jihai & Zhou, Li-An & Zhu, Guozhong, 2016. "Strategic interaction in political competition: Evidence from spatial effects across Chinese cities," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 23-37.
    15. Sidra Naeem & Rana Ejaz Ali Khan, 2021. "Fiscal Decentralization and Gender Equality in Developing Economies: Dynamics of Income Groups in Economies and Corruption," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(9), pages 745-761, September.
    16. Zissimos, Ben & Wooders, Myrna, 2008. "Public good differentiation and the intensity of tax competition," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1105-1121, June.
    17. Xiaosan Zhang & Xiaojie Hu & Fang Wu, 2022. "Fiscal Decentralization, Taxation Efforts and Corporate Green Technology Innovation in China Based on Moderating and Heterogeneity Effects," Sustainability, MDPI, vol. 14(22), pages 1-21, November.
    18. Qiao, Sen & Chen, Hsing Hung & Zhang, Rong Rong, 2021. "Examining the impact of factor price distortions and social welfare on innovation efficiency from the microdata of Chinese renewable energy industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    19. Xianpu Xu & Shan Li, 2022. "Neighbor-Companion or Neighbor-Beggar? Estimating the Spatial Spillover Effects of Fiscal Decentralization on China’s Carbon Emissions Based on Spatial Econometric Analysis," Sustainability, MDPI, vol. 14(16), pages 1-26, August.
    20. Smith, Heidi Jane M. & Revell, Keith D., 2016. "Micro-Incentives and Municipal Behavior: Political Decentralization and Fiscal Federalism in Argentina and Mexico," World Development, Elsevier, vol. 77(C), pages 231-248.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:endesu:v:24:y:2022:i:12:d:10.1007_s10668-021-02032-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.