Impact of Environmental Regulation on the Green Total Factor Productivity of Dairy Farming: Evidence from China

Environmental regulation is essential to promote green and sustainable development in dairy farming. Nevertheless, limited studies have focused on the impact of environmental regulation on the green total factor productivity (GTFP) of dairy farming. This study measures the GTFP of dairy farming in 27 provinces in China during 2009-2020 using the Slack Based Measure (SBM) model and the Malmquist-Luenberger (ML) productivity index. In addition, random effects and threshold regression models are used to measure the impact of environmental regulations on the GTFP of dairy farming. The results demonstrate the fluctuating growth of the GTFP of dairy farming and that technical efficiency is the primary driver of the GTFP growth. The annual growth rate of GTFP is the highest in large-scale dairy farming (3.27%), followed by medium-scale dairy farming (2.73%) and small-scale dairy farming (1.98%). Furthermore, environmental regulation positively affects the GTFP and has a threshold effect on the GTFP, with the urban-rural income gap as the threshold variable in medium-scale dairy farming and small-scale dairy farming. The impact on the GTFP can be significantly negative if the urban-rural income gap crosses the threshold value. Overall, this study provides some policy recommendations for attaining green and sustainable dairy farming development in China.