5A Tourist Attraction Designation and Corporate Green Total Factor Productivity

China’s decentralized governance system relies partly on governance tournaments. We exploit the staggered award of the 5A Tourist Attraction Designation, China’s highest official rating for tourist attractions, as a quasi-natural experiment. We combine city-level designation records with panel data on Chinese A-share listed firms from 2000 to 2023. Difference-in-differences estimates suggests that 5A tourist attraction designation is associated with higher corporate green total factor productivity in affected cities. This result is robust to relaxing the parallel trends assumption, using bounds based on imperfect instrumental variables, and applying estimators that accommodate heterogeneous treatment effects. Evidence on mechanisms points to greater green innovation, substantive improvements in environmental practices, and higher investment efficiency. The effects are larger for non-state-owned firms, downstream firms, and firms located in the Two Control Zones or in cities with more developed green finance. Double machine learning estimates further indicate that the designation strengthens green technology spillovers. These findings identify an environmental governance benefit of tourism-based place designations and show how such policies can promote sustainable development by reshaping local government and firm incentives.