The impact of market coordination on urban green total factor productivity: An analysis of the mediating effect of factor misallocation

Promoting market coordination and enhancing the efficiency of green growth is a necessity for China’s effective economic development. Using panel data from 2007 to 2020, this paper conducts a comprehensive study on 226 cities at the prefecture-level and above, combining theoretical analysis and empirical tests to systematically explore the impact of market cohesion on urban green total factor productivity (GTPF) and the mediating role of factor mismatch. Findings demonstrate that market coordination maximizes urban GTPF. At the mechanism level, factor mismatch plays a mediating role, and market coordination can enhance GTPF by addressing capital and labor mismatch. In terms of heterogeneity analysis, market coordination significantly promotes GTPF positively in the east-central region and negatively in the western region. In terms of technological progress and technical efficiency, the eastern region shows a larger significance than the central and western regions combined. In view of the above, the concept of market coordination development has been implemented to promote GTFP in cities.