Environmental Policy Mixes and Green Industrial Development: An Empirical Study of the Chinese Textile Industry From 1998 to 2012

Policy mixes integrate distinct policy instruments into one coherent policy package as a measure to avoid the potentially counterproductive impacts of any given policy on another. In China, local governments recently have pursued policy mix approaches to resolve the existing policy conflicts, which are associated with the debates over the development priorities between manufacturing productivity growth and environmental mitigations. However, there has been little research that has empirically examined the effects of policy mixes, especially those concerned with the dual-faceted requirements that involve both productivity and the control of emissions. The study presented here employs a model designed to examine firm-level total factor productivity (TFP) and green TFP as performance measures. This article assesses the impacts of municipal-level environmental policy mixes on the textile industry in 13 Chinese cities by using the difference-in-differences technique to analyze the microfirm panel data of 12 133 Chinese textile firms during the period from 1998 to 2012. The results show that these environmental policy mixes could significantly promote green performance without compromising productivity growth. The results also indicate that the impacts varied in different cities. This article offers insight into policy mixes and industrial policy literature as well as practical guides for policymakers and industrialists.