High-speed rail and urban green productivity: The mediating role of climatic conditions in China

Climate change has become a global challenge to the economy and society, highlighting the urgent need for effective policy interventions. Green total factor productivity (GTFP) is a sine qua non for an environmental -friendly and sustainable economy. Therefore, this study investigates the causal relationship between the High -Speed Rail (HSR) and GTFP in a panel of 277 Chinese prefecture-level cities observed from 2003 to 2016. Using the Difference-in-Differences (DiD) approach, we demonstrate that the HSR opening has significantly increased urban GTFP. Furthermore, we explore the channels of the observed positive relationship between the HSR opening and urban GTFP. Specifically, we shed light on the mediating role of climatic conditions, air pollution, and factor agglomeration in the relationship between the HSR opening and GTFP. The results show that climatic conditions significantly mediate this relationship. HSR opening leads to lower pollution and more favourable climatic conditions. Improved climatic conditions drive talent gathering, investment gathering, and green technology concentration, which translate into higher GTFP. Government policies that create favourable climatic conditions to attract green investments in human and physical capital and stimulate green innovations can translate into higher GTFP.