Nonlinear Effects of Governmental and Civil Environmental Regulation on Green Total Factor Productivity in China

Abstract EN

This paper employs metafrontier Malmquist-Luenberger index to measure green total factor productivity and then builds panel model to investigate the nonlinear effects of both governmental and civil environmental regulation on green total factor productivity in 30 provinces of China in 2007–2016, where the threshold variables are environmental awareness and regulatory foundation.

The results show that green total factor productivity takes the characteristic of cyclical fluctuation, and the magnitude and its growth rate in the eastern region are higher than those in the midwestern region.

The degrees of the governmental and civil environmental regulation and green total factor productivity display single environmental awareness threshold and regulatory foundation threshold.

It should be noted that the sign of governmental and civil environmental regulation on green total factor productivity will transform from negative to positive, if and only if threshold variables ascend and surpass the threshold value.

Under the condition of metafrontier technology, governmental environmental awareness threshold value, based on the investigated corruption and malpractice cases by the procuratorates among every hundred thousand people, reaches 0.2158, and civil environmental awareness threshold value based on the per capita education level will attain 12.2330 years, and the corresponding regulatory foundation index threshold values are 0.0163 and 0.0154.

These findings show clear policy implications: rather than continually promoting the level of governmental environmental regulation, civil performance, environmental awareness, and regulatory foundation should be considered.