Research on the impact of the national ecological demonstration zone on green total factor productivity: Evidence from China

Abstract

China is currently confronted with the dilemma of achieving its green development goals while maintaining economic growth. The National Ecological Demonstration Zones (NEDZs) represent an innovative attempt by local governments to balance economic development with ecological civilisation, potentially offering a solution to this issue. This study calculated the Green Total Factor Productivity (GTFP) for 1925 districts and counties from 1999 to 2018. Using the selection of NEDZs as a quasi-natural experiment, a difference-in-differences model was employed to empirically analyse the impact of NEDZs on GTFP. The results indicated that the establishment of NEDZs led to an average increase in GTFP of 0.2175 compared to the control group. The primary mechanisms involved are innovation, structure, and enforcement. Moreover, the green development effects of the NEDZs exhibited regional heterogeneity. Compared to the western regions, the central and eastern regions showed limited green development effects. Areas with smaller populations, lower human capital, and lower administrative levels demonstrated significant improvements after the implementation of the NEDZ. Further analysis reveals a significant spatial agglomeration pattern of GTFP and the NEDZs exert a strong 'siphon effect' on the GTFP of neighbouring areas. This study provides a new perspective on the GTFP research and offers theoretical and practical evidence for assessing the impact of NEDZs.

Keywords: Difference-in-differences model; Green total factor productivity; Instrumental variable method; National ecological demonstration zone; Spatial spillover.