The impact of the governmental environmental policy on the tfp of heavily polluting companies: the evidence from Chinese listed companies

As the concept of sustainable development gradually takes root in people’s minds, China is vigorously pursuing sustainable development policies, with the 13th Five-Year Plan for Ecological and Environmental Protection being an important part of this development. Although some literature has examined the policy, there is still a lack of studies addressing its impact on the total factor productivity of heavily polluting companies. In this paper, based on the premise that the parallel trend test is passed, the empirical study is carried out using the difference-in-difference model, and the empirical findings are tested for robustness using the propensity score matching difference-in-difference with the double machine learning model, and a mechanism analysis is carried out, and finally, the conclusions of this paper are drawn. Firstly, the 13th Five-Year Ecological Environment Protection Policy can promote the total factor productivity of heavily polluting companies. Secondly, there are differences in the impact of the policy on companies of different sizes and technology levels. Finally, environmental policies can further influence total factor productivity by promoting green creation and new quality productivity forces in companies.