<p>Increasing green total factor productivity (GTFP) and achieving green development are important policy objectives. However, there is a scarcity of research examining strategies to boost GTFP in relation to political ambitions. As per China’s target responsibility system setup and fiscal revenue management practice, the degree of ex-ante commitment and ex-post effort on revenue targets within China’s administrative framework is a reflection of local governments’ political ambitions. Using data from 231 Chinese cities, this study analyzes how political ambition impacts GTFP. The findings indicate that the GTFP will be higher if local governments have more political ambition. This effect is more pronounced in samples with high tax extraction capacity, non-resource-based cities, high intensity of promotion competition, and high factor market development. Mechanistic analysis suggests that increased political ambition corresponds with heightened foreign direct investment (FDI) and an enhancement in green innovation, which finally increases GTFP. These findings inform how local governments can improve GTFP.</p>

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Political ambition and green total factor productivity: evidence from China

  • Lujun Wang,
  • Yuyang Ji,
  • Yongmin Luo

摘要

Increasing green total factor productivity (GTFP) and achieving green development are important policy objectives. However, there is a scarcity of research examining strategies to boost GTFP in relation to political ambitions. As per China’s target responsibility system setup and fiscal revenue management practice, the degree of ex-ante commitment and ex-post effort on revenue targets within China’s administrative framework is a reflection of local governments’ political ambitions. Using data from 231 Chinese cities, this study analyzes how political ambition impacts GTFP. The findings indicate that the GTFP will be higher if local governments have more political ambition. This effect is more pronounced in samples with high tax extraction capacity, non-resource-based cities, high intensity of promotion competition, and high factor market development. Mechanistic analysis suggests that increased political ambition corresponds with heightened foreign direct investment (FDI) and an enhancement in green innovation, which finally increases GTFP. These findings inform how local governments can improve GTFP.