Industrial Structure Upgrading, Local Official's Promotion Pressure, and Green Total Factor Productivity: Evidence from China

Bing Le Xiao and Sarma Binti Aralas

Politická ekonomie, vol. preprint

Abstract: The upgrading of industrial structure in China encourages the growth of emerging industries and the transformation of traditional industries, which contributes to high-quality economic development. Meanwhile, environmental regulation plays a key role in developing a green economy. However, the promotion pressure of local officials challenges environmental sustainability. The current study assesses green total factor productivity using the Global Malmquist-Luenberger index based on panel data of 30 provincial units in mainland China for the years 2005 to 2023 and investigates the link between industrial upgrading and green total factor productivity. Findings suggest that industrial structure upgrading significantly improves green total factor productivity. When environmental regulatory standards surpass a certain threshold, the positive impact of industrial constitution optimization on green total factor productivity diminishes. Overly strict environmental law rules may inhibit innovation investment and weaken technological transformation. Moreover, promotion pressure among local officials weakens the positive effect of industrial upgrading on green total factor productivity. China\\\\\\\'s political system has encouraged local officials to pay more attention to the development of secondary industries that have a significant impact on economic growth in the short term, often accompanied by depletion of natural resources and environmental damage. This paper offers a valuable reference for policy research in the development of sustainability in China.

Keywords: Sustainable development; promotion pressure; green total factor productivity; threshold effect (search for similar items in EconPapers)
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DOI: 10.18267/j.polek.1521

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