Fiscal Decentralization, Export Technology Complexity and Regional Green Total Factor Productivity: Empirical Study based on GML Productivity Index

Abstract

With the Global-Malmquist-Luenberger (GML) productivity index, we calculate and evaluate the Chinese green total factor productivity and the decomposition, and further take the dynamic GMM method to empirically study the effect of export sophistication, fiscal decentralization and their interaction terms on regional green total factor productivity. The increasing export technology complexity has a significant effect on the regional green total factor productivity growth. Increasing export sophistication degree means the improving status of international vertical specialization division and upgrading of export product structure, which has a positive incentive effect on adoption of regional environmental technology and transformation and upgrading of regional industrial structure. However, this effect will be disturbed by the regional fiscal decentralization. Fiscal decentralization intensifies local government’s competition and distorts local factor market and resources misallocation. It will  not only distort the incentive of enterprises to increase less technology and the R&D on the export of products, but also will inhibit the upgrading process of regional industrial structure, which would lead to extensive growth trap of “high consumption and high emission”. To continue to enhance China's position in the international division of labor is necessary. Moreover, a diversified evaluation system is encouraged in the performance evaluation system of local officials to optimize the resources allocation efficiency, and propose a proper guidance and incentive for local enterprises to promote industrial transformation and upgrading. Ultimately a win-win situation between ecological civilization construction and economic sustainable growth is achieved.