Local Economic Autonomy and Enterprises’ Green Total Factor Productivity: A Policy Substitution Perspective
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Global climate change and environmental degradation necessitate a transition toward sustainable economic development. The factors influencing green total factor productivity (GTFP), a crucial measure for sustainable economic growth, have garnered significant attention. This study investigates the impact of local economic autonomy on enterprises’ GTFP in China, integrating both fiscal and environmental autonomy. Using panel data from 2008 to 2021, a generalized difference-in-differences (DID) model combined with the non-radial SBM-ML index measures GTFP. Findings indicate that while fiscal autonomy promotes GTFP, environmental autonomy hinders it, resulting in an overall negative effect of economic autonomy. A policy substitution effect emerges; wherein local governments prioritize environmental regulation over support for science and technology. Additionally, industrial structure upgrading plays a role in mitigating the negative impact of autonomy, offering empirical evidence relevant to sustainable development policies in transition economies.
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