The Effect of the National Specially Monitored Firms Program on Water-Polluting Firms’ Green Total Factor Productivity

Kefan Xu, Peng Yuan, Guangjie Wang () and Renjie Yu
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Kefan Xu: Institute of Western China Economic Research, Liulin Campus, Southwestern University of Finance and Economics, Chengdu 610074, China
Peng Yuan: Institute of Western China Economic Research, Liulin Campus, Southwestern University of Finance and Economics, Chengdu 610074, China
Guangjie Wang: School of Marxism, Liulin Campus, Southwestern University of Finance and Economics, Chengdu 610074, China
Renjie Yu: Institute of Western China Economic Research, Liulin Campus, Southwestern University of Finance and Economics, Chengdu 610074, China

Sustainability, 2024, vol. 16, issue 18, 1-20

Abstract: Since 2007, the National Specially Monitored Firms (NSMF) program has been a key instrument in the Chinese government’s environmental regulation efforts and a crucial approach for achieving sustainable development in China. There is limited literature examining its effect on green total factor productivity (GTFP). This study investigates the effect of this policy on water-polluting firms’ GTFP using pollution discharge data from Chinese industrial firms and employing a time-varying difference-in-differences model. The findings illustrate that (1) the NSMF program significantly enhances the GTFP of water-polluting firms, primarily by promoting technological progress; (2) the NSMF program advances water-polluting firms’ GTFP through three channels: alleviating financing constraints, improving human capital, enhancing pollution treatment technologies. This study provides empirical evidence on the effectiveness of the NSMF program, offering valuable insights for the formulation of command-and-control environmental regulations and the pursuit of sustainable social development in the future.

Keywords: the National Specially Monitored Firms program; Malmquist–Luenberger index; green total factor productivity; technological progress (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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