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How Does Industrial Intelligence Enhance Green Total Factor Productivity in China? The Substitution Effect of Environmental Regulation

Author

Listed:
  • Shiheng Xie

    (School of Economics and Management, North China University of Technology, Beijing 100144, China
    These authors contributed equally to this work.)

  • Jiaqi Ji

    (School of Economics and Management, North China University of Technology, Beijing 100144, China
    These authors contributed equally to this work.)

  • Yiran Zhang

    (School of Economics and Management, North China University of Technology, Beijing 100144, China)

  • Shuping Wang

    (School of Economics and Management, North China University of Technology, Beijing 100144, China)

Abstract

Against the dual backdrop of iterative AI advancement and deepening green development imperatives, AI-driven industrial intelligence (INT) has emerged as a pivotal force in driving sustainable economic growth. While the existing literature has explored the correlation between INT and green total factor productivity (GTFP), significant gaps remain in the design of multidimensional variables, analysis of environmental regulation (ER), and capture of dynamic effects. From the perspective of ER, this study utilizes provincial panel data from China (2012–2023) to construct an 11-indicator evaluation system for INT development and employs the EBM super-efficiency model to measure GTFP. Furthermore, a two-way fixed effects model combined with a moderated mediation model is established to systematically elucidate the intrinsic linkage mechanism between INT and GTFP. The key findings are as follows: First, INT has a significant positive impact on GTFP. Second, green innovation and spatio-economic synergy are crucial pathways through which INT empowers GTFP. Third, ER exhibits a substitution effect within both the direct and indirect impacts of INT on GTFP, where intensified ER significantly attenuates INT’s positive impacts. Fourth, the enhancement effect of INT on GTFP remains statistically significant with a one-year lag, and the substitution effect of ER persists. This study provides an in-depth analysis of the mechanisms of INT-driven green economic transformation, offering valuable insights for governments to implement differentiated environmental governance strategies tailored to local conditions.

Suggested Citation

  • Shiheng Xie & Jiaqi Ji & Yiran Zhang & Shuping Wang, 2025. "How Does Industrial Intelligence Enhance Green Total Factor Productivity in China? The Substitution Effect of Environmental Regulation," Sustainability, MDPI, vol. 17(17), pages 1-31, September.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:17:p:7881-:d:1739908
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