Does China-Europe Railway Express Improve Green Total Factor Productivity in China?

Based on the panel data of 284 prefecture-level cities in China from 2005 to 2019, this paper adopts a time-varying difference-in-differences model as a quasi-natural experiment to empirically test the impact and mechanism of the operation of the China-Europe Railway Express on green total factor productivity. The empirical results show that China-Europe Railway Express can significantly improve urban green total factor productivity. In addition, the heterogeneity test manifests that the promotion of green total factor productivity is more significant in the northern regions, the group of cities with low support from the "Belt and Road" policy and high level of their own green development. The results of the mechanism test unveil that the technological innovation effect, industrial upgrading effect and financial development effect brought by the opening of China-Europe Railway Express are the main forces boosting urban green total factor productivity. Furthermore, we found that the optimization of transportation costs, the development of multi-modal transportation and sustainable development are conducive to promoting the high-quality development of freight trains, which helps to strengthen the promotion of green total factor productivity. In brief, this paper provides a new perspective for the study of the economic potential of the China-Europe Railway Express, as well as provides a reference for optimizing the operation mode of China-Europe Railway Express.