Can China’s Campaign-Style Environmental Regulation Improve the Green Total Factor Productivity?

Abstract

The central environmental inspection policy serves as a pivotal instrument for environmental regulation in China, closely intertwined with the nation’s economic and social development into a greener model. Based on the urban data of China from 2004 to 2018, this paper employs a regression discontinuity design to empirically test the inherent mechanism of the central environmental inspection policy’s impact on green total factor productivity, and attempts to analyze its impact on technological progress from the perspective of a bias towards technological advancement. This study found that central environmental inspections can significantly improve green total factor productivity, the mechanism behind this improvement being through the enhancement of technological progress, while having a negative impact on technical efficiency. Additionally, we found that the impact of policies on technological progress is mainly through increasing the magnitude of technological progress, rather than favoring technological progress. The results of this research provide reasonable suggestions for the Chinese government to revise their environmental inspection system.