The Threshold Effect of China’s Financial Development on Green Total Factor Productivity

Yingying Zhou, Yaru Xu, Chuanzhe Liu, Zhuoqing Fang, Xinyue Fu and Mingzhao He
Additional contact information
Yingying Zhou: School of Management, China University of Mining and Technology, Xuzhou 221116, China
Yaru Xu: School of Management, China University of Mining and Technology, Xuzhou 221116, China
Chuanzhe Liu: School of Management, China University of Mining and Technology, Xuzhou 221116, China
Zhuoqing Fang: School of Management, China University of Mining and Technology, Xuzhou 221116, China
Xinyue Fu: School of Management, China University of Mining and Technology, Xuzhou 221116, China
Mingzhao He: School of Management, China University of Mining and Technology, Xuzhou 221116, China

Sustainability, 2019, vol. 11, issue 14, 1-23

Abstract: Using the slacks-based measure (SBM) directional distance function and constructing the Luenberger productivity index, we measure the green total factor productivity (GTFP) of China’s provinces under resource and environmental restrictions. At the same time, based on the provincial panel data, the threshold regression method is used to empirically analyze the impact of financial development on green total factor productivity and its threshold effect. The study explores how technological innovation, foreign direct investment (FDI), and environmental governance affect green total factor productivity, as well as how financial development plays a role in the direction and intensity of the impact, with a view to providing policy recommendations for promoting green economic development. The results show that: (1) during the sample period, China’s green total factor productivity had an overall upward trend, and pure technological progress was the main reason for the growth in the green all-factor growth rate; (2) taking financial development as a threshold dependent variable, financial development had a nonlinear, double-threshold effect on green total factor productivity and diminishing marginal efficiency; (3) the increase in financial development will help attract high-quality and low-pollution FDI inflows, and can exert a technology spillover from FDI to green total factor productivity; (4) the impact of technological innovation on green total factor productivity has a nonlinear feature, with significant positive and increasing marginal efficiency; and (5) there is a positive “U” relationship between environmental governance and green total factor productivity.

Keywords: green total factor productivity; financial development; technological innovation; foreign direct investment; environmental governance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/14/3776/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/14/3776/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:14:p:3776-:d:247103

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().