Welfare and productivity of the Chinese regional economy under forced technology transfer in the post-intervention period of the Green Credit Policy

Abstract

Our study explores the interplay between state-owned enterprises (SOEs) and foreign enterprises under China’s Green Credit Policy. Using matrix completion method, we estimate welfare and productivity impacts, revealing differing trends in coastal and inland provinces. Forced technology transfer in coastal areas drives out foreign capital, while inland regions may experience production expansion. Despite this, our findings indicate an overall negative effect on productivity and welfare. This suggests that promoting the Green Credit Policy under nationalism may inadvertently impede China’s economic progress.