Atmospheric environmental regulation and industrial total factor productivity: the mediating effect of capital intensity

Wang, Qian; Ren, Shenggang; Hou, Ya

Atmospheric environmental regulation and industrial total factor productivity: the mediating effect of capital intensity

2020

Wang, Qian | Ren, Shenggang | Hou, Ya

Balancing economic growth, resource conservation, and atmospheric environmental protection has topped the agenda of academics and policy makers. The article takes the panel data of 37 Chinese industrial sectors from 2003 to 2016 as the research object to explore the impact of atmospheric environmental regulation on industrial total factor productivity and the possible path of capital intensity. Furthermore, to analyze the possible industry heterogeneity of the above results, the article classifies the industrial sectors into heavy polluting industries and light polluting industries, based on their air pollution emission intensity. The key discoveries of this study are as follows: (1) Generally, the regulation of atmospheric environment has a significant inhibitory effect on industrial total factor productivity. However, if measured by industry group, atmospheric environmental regulation has a significant inhibitory effect on industrial total factor productivity in the light polluted industry group, while in the heavy polluted industry group, the impact is less significant. (2) Across all the industries and especially the light polluted industry group, the capital intensity is a partial intermediate variable of the influence of atmospheric environmental regulation on industrial total factor productivity, but the mediating effect is not significant in the heavy polluted industry group. Finally, policy suggestions are given from the following three aspects: promoting accurate industrial governance, selecting environmental regulation methods and improving supporting policies, which provide practical and feasible solutions for improving the current atmospheric environment governance and promoting the improvement of industrial total factor productivity.

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