How Does Urban Compactness Affect Green Total Factor Productivity? An Empirical Study of Urban Agglomerations in Southwest China

With the development of urban scale and economic growth, the challenges posed by limited resources and insufficient environmental carrying capacity become increasingly severe, making the sustainable improvement of production efficiency an urgent requirement. Based on panel data for cities in the Dianzhong Urban Agglomeration and the Chengdu–Chongqing Economic Circle in Southwest China (2012–2021), this study elucidates the positive effect of urban compactness on green total factor productivity (GTFP). By constructing a composite index to measure urban compactness and employing an SBM model to quantify GTFP, we find that a 1% increase in urban compactness leads to a 0.65% increase in GTFP. A mediating-effect analysis reveals that green technological innovation serves as a significant mediator, with a mediating effect value of 0.363. Heterogeneity analysis uncovers differing mechanisms of influence: urban compactness exerts a positive effect in regions with higher levels of economic development, while its impact is not significant in regions with lower economic development, indicating that the effect of compactness varies with economic context; the impact of urban compactness on GTFP is statistically insignificant in regions with higher tertiary sector shares (p > 0.1), whereas it exhibits a highly significant positive effect in regions with lower tertiary sector presence (β = 1.49, p < 0.01). These results collectively demonstrate that the influence of urban compactness on GTFP varies significantly with industrial structure composition. Threshold-effect analysis further shows that there is a threshold in the proportion of industrial output value, beyond which the influence of compactness on GTFP becomes even stronger. Our research quantitatively explores both linear and nonlinear relationships between urban compactness and GTFP, clarifying the linkage between urban spatial dynamics and green production efficiency, and provides empirical evidence and scholarly support for urban planning and economic development.