Realizing green development in agriculture is fundamental to sustained economic development. As a measure to facilitate the transfer of rural population, urbanization is considered to be strategic in promoting agricultural green development. This paper employs a SBM-DDF–Luenberger method to measure agricultural green total factor productivity (AGTFP) and the agricultural labor surplus in China, and empirically tests the heterogeneous effects of household registration urbanization, permanent residence urbanization, and employment urbanization on the efficiency of agricultural green development. The results reveal that: (1) the average annual growth rate of China’s AGFTP is 4.4374%, which is achieved mainly through improvements in green scale efficiency. (2) The agricultural sector in China is suffering a large surplus of labor force, with an estimation of 20.64 million in 2020. (3) Both household registration urbanization and permanent residence urbanization have a significant promoting effect on agricultural green development efficiency, though the former promotes less. (4) Employment urbanization improves agricultural green development efficiency by providing employment guidance for migrant workers, and employment urbanization of the tertiary industry has a more pronounced improvement effect. The findings suggest that governments remove restrictions on the household registration system and actively guide surplus agricultural laborers to engage in urban service industries to provide an impetus for promoting green agricultural development.

Capital misallocation is a main obstacle to China’s economic development. This paper deploys a quasi-natural experiment formed by the ‘Revitalization Plan for Ten Industries’ (RPTI) and examines the impacts that selective industrial policies have on capital misallocation. It is found that the RPTI significantly exacerbates capital misallocation and that the effect does not disappear when the RPTI ends. Mechanism analysis indicates that the RPTI significantly increases the capital productivity of firm groups with high capital productivity but significantly reduces the capital productivity of firm groups with low capital productivity. This can be further interpreted by a decrease or an increase of inefficient investment and financial constraints faced by the corresponding firm groups. The documented relationship is stronger in state-owned enterprises and in firms located in areas of high marketization. Our findings advance the understanding of governmental policy intervention in developing countries.