Effects of smart city policies on green total factor productivity: Evidence from a quasi-natural experiment in China

Abstract

When cities develop rapidly, there are negative effects such as population expansion, traffic congestion, resource shortages, and pollution. It has become essential to explore new types of urban development patterns, and thus, the concept of the “smart city” has emerged. The purpose of this paper is to investigate the links between smart city policies and urban green total factor productivity (GTFP) in the context of China. Based on panel data of 200 cities in China from 2007– 2016 and treating smart city policy as a quasi-natural experiment, the paper uses a difference-in-differences propensity score matching (PSM-DID) approach to prevent selection bias. The results show: (a) Smart city policies can significantly increase urban GTFP by 16% to 18%; (b) the larger the city, the stronger and more significant this promotion.