Research on the nonlinear mechanism of environmental regulations on China's industrial green total factor productivity: Evidence from a dynamic panel threshold model

Environmental regulations (ERs) are effective in balancing industrial economic benefits with ecological protection. The study aimed to explore how ERs combine with R&D expenditure, human capital, industrial structure, and ownership structure to promote industrial green total factor productivity (GTFP) growth in China's industrial sector. Utilizing input-output data from the industrial sector covering 30 provinces and obtained between 2003 and 2021, the Meta-frontier Malmquist-Luenberger (MML) index is employed to measure GTFP. Then, a dynamic panel threshold model is constructed to empirically examine the nonlinear dynamic effect of different types of ERs on GTFP from the perspectives of R&D expenditure, human capital, industrial structure, and ownership structure, with the objective being to reveal the economic conditions under which ERs generate a “strong” Porter effect. The results indicate that: (1) GTFP is significantly enhanced during the observation period, yet it displays pronounced spatial disparities. Technological progress is the main source of GTFP growth. (2) The results of the benchmark model indicate a significant U-shaped relationship between ERs and GTFP. The stimulation effects driven by market-incentive environmental regulation (MIER) and public participation environmental regulation (PPER) are far stronger than those motivated by command-and-control environmental regulation (CCER) and performance-based environmental regulation (PBER). (3) The dynamic relationship between ERs and GTFP depends on R&D expenditure, human capital, industrial structure, and ownership structure. Specifically, ERs exert a stronger positive effect on GTFP in the region with lower degrees of nationalization and higher levels of R&D expenditure, human capital, and industrialization. MIER has the greatest positive effect. However, in the region with a higher degree of nationalization and lower levels of R&D expenditure, human capital, and industrialization, ERs exert a weaker positive effect or even a significant negative effect on GTFP.