Influence of local governments on the greening of the manufacturing sector: A perspective on environmental governance objectives.

ABSTRACT

The green development of manufacturing industries is significantly impacted by local governments. In this study, we focus on assessing the environmental governance effectiveness by examining the tasks assigned by the central government to each province under the Comprehensive Work Program for Energy Conservation and Emission Reduction. By utilizing panel data from 30 provinces and cities in China from 2011 to 2020, we employ the super-efficient SBM model to evaluate China's manufacturing industry's green total factor productivity. Through various models, including the double-fixed effect and the mediation effect, we investigate the influence of environmental governance targets on the green total factor productivity of the manufacturing industry. Our findings reveal a U-shaped relationship between the environmental governance target and the green total factor productivity of the manufacturing industry. When the pressure of environmental governance targets is below a certain critical value, the green total factor productivity decreases as the target pressure increases. However, once the target pressure surpasses this critical value, the green total factor productivity experiences a positive correlation with the target pressure. Further analysis demonstrates that this U-shaped relationship is observed in regions with low and medium marketization, while regions with high marketization remain unaffected. Moreover, the impact of environmental governance target pressure on green total factor productivity in manufacturing is facilitated by the promotion of green innovation. Furthermore, the relationship between environmental governance target pressure and green total factor productivity in manufacturing is moderated by local government fiscal expenditures. In regions where fiscal expenditures are higher, the influence of environmental governance target pressure on green total factor productivity in manufacturing is more pronounced.