Regional coordination and industrial green total factor productivity: evidence from the yangtze river delta economic coordination council

Abstract

Fragmented local governance can limit productivity-based industrial greening in urban agglomerations, especially when production activities, environmental externalities, and innovation flows extend across administrative boundaries. This study examines whether formal regional coordination improves industrial green total factor productivity by alleviating institutional fragmentation. Using panel data for Chinese cities from 2004 to 2024, we use the staggered accession of cities to a regional coordination institution as a quasi-experimental setting and estimate its effects with staggered-adoption difference-in-differences models. Cities outside the coordinated region that were never exposed to the institution serve as an external comparison group for later-period identification. Regional coordination significantly improves industrial green total factor productivity, and the effect becomes stronger over time. Further analysis suggests that this improvement is related to reduced capital and labour misallocation, stronger environmental regulation, smaller regulatory differences across jurisdictions, and greater green innovation. The effect is more pronounced in cities with larger initial economic scale, while spatial econometric results indicate positive spillovers to neighbouring cities. These findings suggest that formal regional coordination can help convert fragmented local regulation into more coherent environmental governance, providing evidence for urban agglomerations seeking cleaner and more efficient industrial development.