Bilateral effects of carbon emission reduction target constraints on urban green total factor productivity

It is necessary to assess the impact of carbon emission reduction targets on urban green total factor productivity, a topic with significant practical implications. Based on a panel data of 275 Chinese cities, this paper constructs a two-tier stochastic frontier model to evaluate the "innovation compensation" spillover effect, "compliance cost" crowding-out effect, and net effect of carbon emission reduction targets on urban green total factor productivity. The main conclusions of this paper are as follows: (1) Carbon emission reduction targets have both "innovation compensation" spillover effects and "compliance cost" crowding-out effects on urban green total factor productivity. Among the effects of carbon emission reduction targets, the spillover effect prevails over the crowding-out effect. Specifically, the spillover effect of carbon emission reduction targets increases urban green total factor productivity by 6.468% relative to the frontier, while the crowding-out effect reduces urban green total factor productivity by 1.655% relative to the frontier. The combined action of the spillover and crowding-out effects results in a net effect of a 4.814% increase in urban green total factor productivity due to carbon emission reduction targets. (2) The spillover effect, crowding-out effect, and net effect of carbon emission reduction targets on urban green total factor productivity exhibit temporal and spatial variations. Specifically, under the combined influence of the spillover and crowding-out effects, the net effect of carbon emission reduction targets on urban green total factor productivity shows a U-shaped curve over time. Spatially, under the combined influence of the spillover and crowding-out effects, the net effect of carbon emission reduction targets on urban green total factor productivity varies across eastern, central, and western regions. The net effect is strongest in the western region, followed by the central region, and weakest in the eastern region. (3) Regional characteristic factors influence the spillover and crowding-out effects of carbon emission reduction targets on urban green total factor productivity. Specifically, local economic growth pressure, resource endowment, and financial development level all contribute to heterogeneous manifestations of how carbon emission reduction targets affect urban green total factor productivity through spillover and crowding-out effects. The conclusions of this study have theoretical and practical significance. These findings not only enhance our understanding of the complex impact of China's carbon intensity target management on urban green development but also offer practical insights for local governments to refine the design of emission reduction policies.