The Non-Linear Effect of Dual Environmental Regulation on Urban Green Total Factor Productivity: Evidence from 284 Cities in China

Abstract

This study utilizes the super-efficiency SBM model to assess green total factor productivity, employs textual analysis to assess formal environmental regulation, and applies the entropy weighting method to assess informal environmental regulation using a dataset of 284 cities between 2003 and 2020. This study also employs the two-way fixed effects model and SDM to empirically examine the impact of dual environmental regulation on urban green total factor productivity. Based on the research results, the overall trend indicates that dual environmental regulation has a positive “U”-shaped impact on the green total factor productivity of both local and neighboring areas, and the improvement of green total factor productivity in the local area will lead to a corresponding increase in the green total factor productivity of neighboring cities. Heterogeneity analysis shows that formal environmental regulation has a significant effect in the Yangtze River Delta, the Pearl River Basin, and non-resource-based cities, but not in the Bohai Rim Economic Circle or resource-based cities; in all regions outside the Pearl River Basin, informal environmental regulation has a non-linear “marginal increasing effect” on green total factor productivity. These findings remain robust to a number of robustness and endogeneity issues. The study findings indicate that to optimize the influence of dual environmental regulation on green total factor production, governments should meticulously devise new environmental regulations and build novel channels for regional collaboration to enhance their supportive effects.