Since air pollution is an important factor hindering China’s economic development, China has passed a series of bills to control air pollution. However, we still lack an understanding of the status of environmental efficiency in regard to air pollution, especially PM_2.5 (diameter of fine particulate matter less than 2.5 μm) pollution. Using panel data on ten major Chinese city groups from 2004 to 2016, we first estimate the environmental efficiency of PM_2.5 by epsilon-based measure (EBM) meta-frontier model. The results show that there are large differences in PM_2.5 environmental efficiency between cities and city groups. The cities with the highest environmental efficiency are the most economically developed cities and the city group with the highest environmental efficiency is mainly the eastern city group. Then, we use the meta-frontier Malmquist EBM model to measure the meta-frontier Malmquist total factor productivity index (MMPI) in each city group. The results indicate that, overall, China’s environmental total factor productivity declined by 3.68% and 3.49% when considering or not the influence of outside sources, respectively. Finally, we decompose the MMPI into four indexes, namely, the efficiency change (EC) index, the best practice gap change (BPC) index, the pure technological catch-up (PTCU) index, and the frontier catch-up (FCU) index. We find that the trend of the MMPI is consistent with those of the BPC and PTCU indexes, which indicates that the innovation effect of the BPC and PTCU indexes are the main driving forces for productivity growth. The EC and FCU effect are the main forces hindering productivity growth.

China’s Belt and Road Initiative is a significant regional economic cooperation. This paper uses the Belt and Road Initiative (BRI) as a quasi-natural experiment to investigate the impact of regional economic cooperation on environmental quality. Using difference-in-differences (DID) and a series of robustness checks, we find that regional economic cooperation like BRI deteriorates environmental quality in countries along the Belt and Road. The main reason is that the improving effects on environmental quality in the BRI countries are smaller than in the non-BRI countries after the BRI. The ecological impacts of the BRI exist differences in different countries. The results show that the BRI improves environmental quality in South Asia, and Europe and Central Asia. However, the BRI negatively affects environmental quality in East Asia and Pacific, developing and non-OECD countries. We found that, unlike the BRI, the Green BRI improves environmental quality in countries along the Belt and Road. We also discuss the mechanism of the BRI on environmental quality from foreign direct investment (FDI).

Taking China’s carbon emissions and trading pilot (CCETP) as a quasi-natural experiment, this paper examines the impact of CCETP on publicly listed private firms’ innovation input and the moderating effect of the firms’ political connection based on the difference-in-differences model. The results show that CCETP has a significantly positive effect on the innovation input of Chinese publicly listed private firms. Moreover, the political connection of executives exhibits a positive moderating effect on CCETP’s impact on innovation input. Meanwhile, the effect is more significant in regions with high environmental protection investment and large publicly listed private firms. The conclusions could provide some policy enlightenment for China’s carbon market, as well as a rational adjustment of the relationship between political connection and innovation input of publicly listed private firms in the future.