Cleaner production and total factor productivity of polluting enterprises

The green and high-quality development of China's manufacturing industry requires the implementation of cleaner production practices. This study constructs a cleaner production index for polluting enterprises based on the detailed indicators of industrial cleaner production standards. Using data from the Green Development Database and the Industrial Enterprise Database from 1998 to 2012, this study analyzes the influence, transmission mechanism, and heterogeneity effect of the cleaner production index on the total factor productivity of polluting enterprises. The results show that improving the cleaner production index of polluting enterprises promotes total factor productivity, and this conclusion remains valid after taking several robustness tests. The improvement of the cleaner production index of polluting enterprises brings the demand for skilled labor and equipment capital containing technological progress, and the improvement of productivity comes from the capital-embodied technological progress which is complementary to the skill demand and skill premium. The study also finds that increasing the cleaner production index of polluting enterprises has a greater promoting effect on the total factor productivity of heavily polluting industries, large-scale enterprises, and enterprises in the western region. The improvement of the cleaner production index of polluting enterprises increases total factor productivity of state-owned and private enterprises but has no effect on foreign enterprises. These findings provide empirical evidence and policy implications for promoting high-quality development of the manufacturing industry through cleaner production governance, highlighting the importance of implementing cleaner production practices, introducing advanced production equipment, and skilled workers to achieve economies of scale and increase total factor productivity.