The impact of urbanisation on green total factor productivity: Exploring threshold and mediating effects of human capital

Abstract Green development is main direction of high‐quality economic development in China. Urbanisation and human capital (HC) are important factors affecting green development. This study examines effects of urbanisation and HC on green total factor productivity (GTFP) using least squares dummy variable model, based on provincial data in China from 2001 to 2019. This study then explored impact of urbanisation on GTFP through HC (educated HC, healthy HC, and HC structure), adopting mediating effect and threshold effect model. The results showed that urbanisation and three types of HC promote GTFP in China and coastal region. In inland region, urbanisation has insignificant impact on GTFP, while educated HC and HC structure improve it. The mediating analysis revealed that educated and healthy HC in China and coastal region enhance promotion effect of urbanisation on GTFP, whereas HC structure hinders it. In inland region, only healthy HC stimulates promotion effect of urbanisation on GTFP. Considering threshold effect of educated and healthy HC, promotion effect of urbanisation on GTFP is weaker than threshold value; but effect is stronger above threshold value. The promotion effect of urbanisation on GTFP is stronger when value of HC structure is below the threshold, while effect is weakened as value exceeds threshold value. Policy implications are documented to promote urbanisation in a differentiated manner, increase investment in HC, and strengthen coordination between urbanisation and HC.