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Open AccessArticle

Environmental Regulation, Resource Misallocation and Industrial Total Factor Productivity: A Spatial Empirical Study Based on China’s Provincial Panel Data

1
School of Economics, Zhengzhou University of Aeronautics, Zhengzhou 450046, China
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School of Information Management, Zhengzhou University of Aeronautics, Zhengzhou 450046, China
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School of Economics and Business Administration, Central China Normal University, Wuhan 430079, China
*
Author to whom correspondence should be addressed.
Academic Editor: Roberta Arbolino
Sustainability 2021, 13(4), 2390; https://doi.org/10.3390/su13042390 (registering DOI)
Received: 8 January 2021 / Revised: 18 February 2021 / Accepted: 19 February 2021 / Published: 23 February 2021
A vast theoretical and empirical literature has been devoted to exploring the relationship between environmental regulation and total factor productivity (TFP), but no consensus has been reached and the reason may be attributed to the fact that the resource reallocation effect of environmental regulation is ignored. In this paper, we introduce resource misallocation in the process of discussing the impact of environmental regulation on TFP, taking China’s provincial industrial panel data from 1997 to 2017 as a sample, and the spatial econometric method is employed to investigate whether environmental regulation has a resource reallocation effect and affects TFP. The results indicate that there is a U-shaped relationship between environmental regulation and industrial TFP and a negative spatial spillover effect of environmental regulation on industrial TFP at the provincial level in China. Both capital misallocation and labor misallocation will lead to the loss of industrial TFP. Capital misallocation has a negative spatial spillover effect on industrial TFP, while labor misallocation is just the opposite. Environmental regulation can produce a positive resource reallocation effect, which in turn promotes the industrial TFP in the range of 28% to 33%, while capital misallocation and labor misallocation are only partial mediator. View Full-Text
Keywords: environmental regulation; industrial total factor productivity; capital misallocation; labor misallocation; spatial durbin model; resource reallocation effects environmental regulation; industrial total factor productivity; capital misallocation; labor misallocation; spatial durbin model; resource reallocation effects
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MDPI and ACS Style

Dong, X.; Yang, Y.; Zhao, X.; Feng, Y.; Liu, C. Environmental Regulation, Resource Misallocation and Industrial Total Factor Productivity: A Spatial Empirical Study Based on China’s Provincial Panel Data. Sustainability 2021, 13, 2390. https://doi.org/10.3390/su13042390

AMA Style

Dong X, Yang Y, Zhao X, Feng Y, Liu C. Environmental Regulation, Resource Misallocation and Industrial Total Factor Productivity: A Spatial Empirical Study Based on China’s Provincial Panel Data. Sustainability. 2021; 13(4):2390. https://doi.org/10.3390/su13042390

Chicago/Turabian Style

Dong, Xu; Yang, Yali; Zhao, Xiaomeng; Feng, Yingjie; Liu, Chenguang. 2021. "Environmental Regulation, Resource Misallocation and Industrial Total Factor Productivity: A Spatial Empirical Study Based on China’s Provincial Panel Data" Sustainability 13, no. 4: 2390. https://doi.org/10.3390/su13042390

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