The Impact of Environmental Courts on Green Total Factor Productivity in Chinese Cities

Abstract

As a judicial environmental regulation strategy designed to promote environmental protection, environmental courts have drawn substantial interest. However, whether they can effectively balance the economy and the environment requires further exploration. In this study, we utilized data from 282 Chinese cities from 2004 to 2019 to examine the relationship between environmental courts and green total factor productivity using a multi-period difference-in-differences model. The findings were as follows: (1) Environmental courts led to a notable increase in green total factor productivity. (2) The reduction in carbon intensity and the enhancement of administrative environmental regulation mediated the increase driven by environmental courts. (3) The financial institutions’ support and green technology innovation positively moderated the impact of environmental courts. (4) The role of environmental courts was more pronounced in the western region and in non-low-carbon pilot cities. We explored environmental courts’ effects on green economy development and the internal mechanisms of this, providing policy recommendations to achieve more effective judicial impacts.