Going Green or Going Away? A Spatial Empirical Examination of the Relationship between Environmental Regulations, Biased Technological Progress, and Green Total Factor Productivity

Xueli Wang, Caizhi Sun, Song Wang, Zhixiong Zhang and Wei Zou
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Xueli Wang: Center for Studies of Marine Economy and Sustainable Development, Liaoning Normal University, 850 Huanghe Road, Dalian 116029, China
Caizhi Sun: China Institute of Boundary and Ocean Studies, Wuhan University, Wuhan 430072, China
Song Wang: Institute for the Development of Central China, Wuhan University, Wuhan 430072, China
Zhixiong Zhang: College of Urban and Environment, Liaoning Normal University, 850 Huanghe Road, Dalian 116029, China
Wei Zou: College of Urban and Environment, Liaoning Normal University, 850 Huanghe Road, Dalian 116029, China

IJERPH, 2018, vol. 15, issue 9, 1-23

Abstract: China’s economic development has resulted in significant resource consumption and environmental damage. However, technological progress is important for achieving coordinated economic development and environmental protection. Appropriate environmental regulation policies are also important. Although green total factor productivity, environmental regulations, and technological progress vary by location, few studies have been conducted from a spatial perspective. However, spatial spillover effects should be taken into consideration. This study used energy consumption, the sum of physical capital stock and ecological service value as total capital stock, the number of employed people as inputs, sulfur dioxide emissions as undesired outputs, and green GDP as total output to obtain green TFP through a slacks-based measure (SBM) global Malmquist-Luenberger Index. This study also estimated China’s biased technological progress under environmental constraints from 2004 to 2015 based on relevant data (e.g., green GDP, total capital stock, and employment figures). The relationship between green total factor productivity (GTFP), technological progress, and environmental regulation was then examined using a spatial Durbin model. Results were as follows: (1) Based on the complementary elements, although the labor costs gradually increase, the rapid accumulation of capital leads to technological progress that is biased toward capital. However, technological progress in the labor bias can significantly increase GTFP. (2) There is a u-shaped relationship between existing environmental regulations and GTFP. Technological progress can significantly promote GTFP in the surrounding areas through existing environmental regulations. (3) Under spatial weight, the secondary industry coefficient was negative while human capital stock and FDID had positive effects on GTFP. Technological progress is the source of economic growth. It is therefore necessary to promote biased technological development and improve labor-force skills while implementing effective environmental regulation policies.

Keywords: biased technological progress; environmental regulation; green total factor productivity; spatial Durbin model (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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