The heterogeneous dynamic effect of financial development and environmental regulation on Chinese urban green technology management efficiency

Abstract

China is facing the large-scale urbanization and great pressure of energy consumption and environmental protection in the past few decades. In this process, urban green technology management efficiency (GMEC) is of great importance for the future work of greener transformation. Using China's 286 city-level panel data from 2006 to 2018, this paper proposes a global Malmquist index, PVAR, and panel quantile regression model to explore the heterogeneous dynamic effect of financial development (FIN) and environmental regulation (ER) on GMEC. The results indicate that during 2006-2018, (1) the growth rate of GMEC fluctuated violently, with a change of more than 28%. In addition, there is "one tight and one loose" phenomenon of GMEC. This indicates that there is much room for the improvement of GMEC; (2) in northeast cities, FIN is not conductive to GMEC, but in other regional cities, FIN has dynamic beneficial effect on GMEC. In addition, FIN represents a changing trend of dropping at first to rising afterwards in all regional cities; (3) furthermore, from time angle, ER has the heterogenous dynamic effect on GMEC among regional cities. Specifically, in northeast, eastern, central, and western cities, GMEC has an "M," "N," "U," and "U"-shaped relationship with the level of ER, respectively. From space angle, there is distinct heterogeneous effect of ER on GMEC at different quantiles within regional cities. Therefore, the local government are supposed to establish and implement policies based on regional cities' characteristics.

Keywords: Chinese urban green technology management efficiency; Environmental regulation; Financial development; Heterogeneous dynamic effect; PVAR model; Panel quantile regression model.