Construction of the Pilot Free Trade Zone and Chinese Green Total Factor Energy Efficiency

Abstract

In the context of China’s “double carbon” target, paying attention to regional green total factor energy efficiency (GTFEE) is crucial for ensuring a fundamental guarantee for China’s free trade zones for the promotion of sustainable development in China’s free trade zones. However, the existing literature lacks focus on the environmental effects of these zones. This study takes advantage of the pilot free trade zone (PFTZ) implemented in 2013 as a natural experiment, utilizing panel data from 2009 to 2020 for Chinese prefecture-level cities. It adopted a progressive difference-in-difference model to assess the effect of the PFTZ on GTFEE. The findings demonstrate a remarkable improvement in GTFEE due to the PFTZ, which remains robust even after conducting robustness checks, including the parallel trend test. The PFTZ achieves this improvement by facilitating industrial structure upgrading and promoting green technology innovation. The positive influence of the PFTZ on GTFEE is particularly prominent in coastal cities and non-resource-based cities. This study contributes to the understanding of the environmental effects of free trade zones, providing a direct response to the key question of whether the free trade zone policy can effectively support high-quality economic development in the new era. Moreover, it offers useful policy implications for advancing further openness, winning the battle against pollution, and boosting high-quality economic development.

Research on the impact of pilot free trade zones on urban green development: A case study based on the Yangtze River Economic Belt in China

“…strengthening the connotation of these zones. However, most existing policy evaluation studies have focused on exploring the economic effects of coastal PFTZs [7,8]. Whether the PFTZs along the YREB can replicate the institutional innovation achievements of coastal PFTZs remains a subject for further research.…”

“…Empirical studies by Jiang et al [37] and Ma et al [38] on the Shanghai PFTZ revealed significant institutional dividends and a positive correlation between PFTZs and GTFP, albeit with diminishing effects over time. Furthermore, Chang et al [2] found that the establishment of PFTZs significantly fosters regional green and high-quality development, while Zhang and Zhou [8] identified that PFTZs enhance regional green total factor energy efficiency through industrial structure upgrades and promotion of green technological innovation.…”

“…The establishment of PFTZs typically facilitates the enhancement and streamlining of the industrial chain [7], fosters the integration and collaboration of diverse industries [8], establishes a more comprehensive and efficient industrial ecosystem, minimizes resource wastage, enhances resource utilization efficiency, and decreases energy consumption and emissions [18], thus advancing the eco-friendly development of the city. PFTZs create a conducive environment and circumstances for the growth of emerging industries, spur the establishment and advancement of green supply chains [3,43], and drive the urban transition towards sustainability.…”

“…Moreover, the construction of PFTZs should guide technological innovation activities to focus on future technological iterations, driving industrial green upgrades. PFTZs can enhance the efficiency of urban green development by elevating the level of urban innovation [16] (Zhang et al, 2023). The government should fully leverage its role as a service-oriented government, paying attention to the carbon emission reduction effects brought about by technological progress.…”