AUTHOR=Shahid Rabia , Shijie Li , Yifan Ning , Jian Gao 

TITLE=Pathway to green growth: A panel-ARDL model of environmental upgrading, environmental regulations, and GVC participation for the Chinese manufacturing industry

JOURNAL=Frontiers in Environmental Science

VOLUME=Volume 10 - 2022

YEAR=2022

URL=https://www.frontiersin.org/journals/environmental-science/articles/10.3389/fenvs.2022.972412

DOI=10.3389/fenvs.2022.972412

ISSN=2296-665X

ABSTRACT=Since the opening up of China, its manufacturing sector contributed significantly towards economic development on one hand, and caused elevated environmental pollution and heavy resource consumption problems on the other hand. Green productivity is an essential means of addressing environmental problems, promoting sustainable environmental performance, and long-term economic growth. While the factors affecting green total factor energy productivity (GTFEP) are studied in recent years, hitherto literature lacks the relationship between GTFEP, environmental regulations and GVC participation. Using GTFEP as a proxy of environmental upgrading for Chinese manufacturing industry, this study investigates the nexus between GTFEP, environmental regulation index (ERI) and total production length index (TPLI). Based on panel data 18 industries from 2000 to 2014, current study employed the panel pool mean group estimators for auto-regressive distributed lag model (ARDL), and estimated the long-run relationship between variables. Findings revealed the positive effect of ERI and GVC participation (TPLI) on GTFEP of Chinese manufacturing industry. Further, pairwise panel causativeness analysis indicated unidirectional causality between GTFEP and ERI, running from GTFEP to ERI. Based on research findings, some conclusions and policy implications are derived, such as strict enforcement of environmental regulations, industry specific policies, promotion of clean energy resources, and acceleration of country’s further opening up and reforms. All these will help to promulgate GTFEP and environmental upgrading of Chinese manufacturing sector, thus leading to sustainable and decoupled economic development from environmental pollution.