Research On The Influence Mechanism Of Environmental Total Factor Productivity On Green Upgrading Of China’s Industries

Since the international financial crisis broke out in 2008,China’s traditional comparative advantages,such as the "demographic dividend" have been disappearing gradually.Many contradictions in China’s economy which have been masked by the phenomenal economic growth rates are emerging now.One the one hand,China’s economy has embedded in the low end of the global value chain and excessively depended on the low-cost and primary factors of production.It leads to weak competitiveness and extensive growth model which is unsustainable.On the other hand,China’s industrial structure is dominated by energy-and pollution-intensive industries,which leads to serious energy exhaustion and environmental damages.Thus,industrial upgrading is the key way to achieve sustainable growth model for China,while "green" development is the major trend of China’s industrial upgrading in future.Consequently,this paper points out that the connotation of industrial upgrading must be consistent with the current requirements of constructing resource-conserving and environmentally friendly society;that is,the connotation of industrial upgrading contains not only the economic implications,such as technological progress and industrial restructuring,but also the environmental implications,such as cleaner production and emission abatement.We call it the "green" upgrading of industries.For the question of how to achieve green upgrading of industries,this paper put forward the idea of environmental productivity-driven strategy.It implies that the main approach to promote industrial green upgrading is to improve environmental TFP growth.This paper demonstrates the main view of point from two aspects of theoretical analysis and empirical analysis.In the part of theoretical research,this study establishes a one-sectoral green growth model and a multi-sectoral structural adjustment model accounting for energy consumption and emissions under the framework of the neoclassical economic theory and depicts the effect of environmental TFP on industrial green upgrading.The results show that,for the one-sector model,the improvement of environmental TFP is the core factor to achieve both per capita output growth and emission abatement simultaneously.For the multi-sectoral model,we find that the structural change is mainly driven by the differences in environmental TFP growth rates across sectors.In the part of empirical research,employing a panel data of China’s 35 industries during 2001-2014,we firstly use a slacks-based measure(SBM)and Luenberger Productivity Index to evaluate the industrial environmental TFP accounting for energy consumption and undesirable outputs.Afterwards,we apply the GMM method to examine the driving effect of environmental TFP on industrial structure supererogation and on the cleaner upgrading of industrial structure,respectively.The results of environmental TFP growth rates show that the annual average growth rates of China’s industrial environmental TFP is only 2.6648%which is far below the growth rates of capital,energy and other inputs.It suggests that China’s industrial growth is mainly driven by inputs but not productivity,and the model of development has not been on the path towards "green" growth yet.The empirical results show that environmental TFP has a significantly positive effect on industrial structure supererogation while the capital labor ratio has a negative effect.It implies that the impetus for industrial structure supererogation is shifting from factor inputs to environmental TFP growth.Besides,if an enterprise achieves positive environmental TFP growth rates,it must gain effective green technological progress and green efficiency improvements.It manifests that environmental TFP growth will significantly promote the cleaner upgrading,especially for the emission-intensive industries.We will contribute to the previous literature mainly in three ways.① Extended and improved the Green Solow Model,we establishe a one-sector green growth model and demonstrate that environmental total factor productivity is the main factor to drive industrial sectors to upgrade,so that the current research content has been enriched.② we treat the energy input and pollution emissions as the factor of production and undesirable output,respectively,to establish a multi-sectoral structural adjustment model incorporating energy consumption and emissions,so that the environmental TFP driving strategy has been proved effectively.③ How to adequately measure the level of industrial green upgrading is one of the major difficulties in empirical analysis.This paper employs the value-added rate and emission intensity as proxies for industrial structure supererogation and cleaner upgrading of industrial structure,respectively.It allows us to accurately depict the real level of China’s industrial green upgrading and to guarantee the explanatory power of our empirical results to the reality.