Rent-seeking, promotion pressure and green economic efficiency: Evidence from China

Focusing on the quality and sustainability of urban economic development and using a panel dataset of 263 cities in China from 2004 to 2015, this paper regards each city as a production unit and uses the Epsilon-Based Measure approach to measure green economic efficiency by innovatively regarding labor, capital, land and energy as input factors, GDP as a desirable output, and environmental pollution emissions and land finance as undesirable outputs. Further, this paper examines the effect of rent-seeking on green economic efficiency with a fixed effects model and explores the role of promotion pressure in the relationship between rent-seeking and green economic efficiency with a panel threshold model. Our study finds that: (1) Rent-seeking exerts a significant negative impact on green economic efficiency. (2) Compared to areas of higher promotion pressure, the negative effect of rent-seeking on green economic efficiency is greater in areas facing lower promotion pressure. (3) The relationship among promotion pressure, rent-seeking and green economic efficiency differs in areas facing different “green” promotion pressure.