Supply-shock, demand-induced or superposition effect? The impacts of formal and informal environmental regulations on total factor productivity of Chinese agricultural enterprises

• Published in: Journal of cleaner production Vol. 380; p. 135052
• Main Authors: Liu, Yunqiang, She, Yanan, Liu, Sha, Lan, Hongxing
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 20.12.2022
• Subjects: DID; Environmental regulations; Green innovation; Market forces; PSM-DID; Total factor productivity; Total factor productivity; Environmental regulations; PSM-DID; Market forces; Green innovation; DID
• ISSN: 0959-6526; 1879-1786
• DOI: 10.1016/j.jclepro.2022.135052

Agricultural production struggles with low efficiency and high emissions. This urgently calls for a collaborative effort between government and non-government organizations in environmental governance and policy implementation. In order to explore the supply-shock, demand-induced or superposition effects of the formal and informal environmental regulations to agricultural total factor productivity, using listed Chinese agricultural enterprise data from 2003 to 2018 as a sample, this paper employed a two-way fixed difference-in-difference model to analyze from supply and demand perspective. The results indicate that, (1) formal environmental regulations and environmental non-governmental organizations not only drive total factor productivity caused by dynamic changes on the supply and demand sides respectively, but also exhibit strong policy superposition effect. (2) The Analysis of policy intensity heterogeneity illustrated that the intensity of command-control and market-incentive environmental regulations could exert impact on the direct dual policies’ effects. (3) The mechanism test found that green innovation and market forces play a mediating or regulating role. This paper provides empirical evidence for strengthening the policy orientation of synergistic governance, and has certain reference significance to realize the rise of green agriculture-supporting economy. [Display omitted] •Analysis is based on the supply and demand sides, with DID method mainly.•Heterogeneous environmental regulations respectively stimulate total factor productivity.•Dual regulations could generate a superposition effect.•Policy effects are affected by the heterogeneity across policy intensity.•Green innovation and market forces have regulating or mediating effects.