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Who are the genuine contributors to economic development under environmental regulation? Evidence from total factor productivity in the three industries

Author

Listed:
  • Wenjun Ge

    (Guangdong Ocean University)

  • Siyuan Wu

    (Guangdong Ocean University)

  • Derong Yang

    (Guangdong Ocean University)

Abstract

In recent years, the miracle of China achieving a balance between environmental governance and high economic growth has attracted the attention of many scholars, especially at the production level in various industries. To search for production activities with sustainable development potential and explore their characteristics. This study uses the panel data of 31 provinces in China from 2011 to 2020 to establish a unified analysis framework based on the division criteria of three industries. It takes the three industries' total factor productivity (TFP) as the entry point to study the impact of environmental regulation (ER) on economic growth and its potential mechanisms at the production level. The results show that ER will force the secondary industry to improve TFP but also negatively affect the TFP of the primary and tertiary industries. In addition, ER indirectly affects TFP in the three industries by affecting public environmental concerns and foreign direct investment. This results from the comprehensive effect of production cost effects, compensation effects of innovation, and compensation effects of optimizing resource allocation caused by ER. Moreover, the positive impact of ER on the TFP of the secondary industry is nonlinear. The higher the level of digital economy development, the more significant the positive impact. More importantly, there are regional differences in the impact of ER on the TFP of the primary and secondary industries. This article considers both static and dynamic panels and the results of the two models show consistency.

Suggested Citation

  • Wenjun Ge & Siyuan Wu & Derong Yang, 2024. "Who are the genuine contributors to economic development under environmental regulation? Evidence from total factor productivity in the three industries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 22801-22838, September.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:9:d:10.1007_s10668-023-03577-3
    DOI: 10.1007/s10668-023-03577-3
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    Keywords

    Environmental regulation; Three industries; Total factor productivity; System GMM; Threshold regression;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • Z19 - Other Special Topics - - Cultural Economics - - - Other

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