Environmental regulation induces technological change and green transformation in Chinese cities

Improving green total factor productivity is an important step for China’s green transformation. By proposing a meta-frontier Malmquist Luenberger productivity indicator, this paper attempts to investigate China’s green productivity evolution and its determinants at the city level during the period of 2003–2016. Our results reveal that China has improved green productivity, and that exogenous technological change acts as the dominant force to drive the change of green productivity. Overall, the effects of technological change induced by environmental regulation (TCIER) have not been fully manifested. Further, we find significant spatial heterogeneities in TCIER: western China shows the highest contribution of TCIER to changes in green productivity, followed by central China, and the contribution is negative in eastern China, due to the region’s relatively lower growth rate in environmental regulation intensity. Nevertheless, from the perspective of evolutionary trends, the TCIER scores of all three regions exhibit upward trends during the review period, ultimately contributing positively to green productivity growth during the 12th Five-Year Plan period (2011–2015).