The Impact of China’s Foreign Aid on Green Total Factor Productivity in Recipient Countries

This study examines the effect of Chinese foreign aid on GTFP across 85 BRI countries (2004–2022), measured via SBM-DDF/Luenberger with Driscoll–Kraay fixed-effects estimation. Aid is negatively and significantly associated with GTFP, a result that is robust to two-way fixed effects and aid-modality disaggregation. A 2SLS check yields a directionally consistent but statistically insignificant estimate, which limits causal inference. The negative association is concentrated in high-income recipients (group difference not significant). An exploratory mediation check does not provide evidence supporting a positive human-capital pathway. The findings suggest integrating environmental safeguards and strengthening institutional capacity in aid policy.