How Do Rising Labor Costs Affect Green Total Factor Productivity? Based on the Industrial Intelligence Perspective

Abstract

In the context of the fading demographic dividend, rising labor costs present both opportunities and challenges to China’s green and sustainable development. This paper aims to investigate the impact of rising labor costs on the inter-provincial green total factor productivity (GTFP) of China and to explore the moderating effect of industrial intelligence. Both provincial panel data from 2010 to 2019 and the system GMM model, moderating effect model, and panel threshold model are used to empirically analyze the relationship between the three economic variables. The results show that: Firstly, during the sample period, China’s rising labor costs significant contribute to GTFP, and strengthening green technological progress (GTP) is the main delivery path, though it hinders the improvement of green technological efficiency (GTE). Secondly, industrial intelligence plays an enhanced positive moderating role in the path of labor costs affecting GTFP. Thirdly, grouped regressions show that the role of labor costs only emerges when industrial intelligence reaches a certain high level. Finally, taking industrial intelligence as a threshold dependent variable, labor costs have a non-linear, triple-threshold effect on GTFP. The promotion effect of labor costs increases the most when industrial intelligence exceeds the first threshold. On balance, as the level of industrial intelligence continues to increase, the promotion effect is stronger. The above empirical results are robust under the robustness test of replacement variables and estimation method. The results indicate that the innovation development effect of rising labor costs has to be built on the basis of industrial intelligence development.