The Effect of the National Specially Monitored Firms Program on Water-Polluting Firms’ Green Total Factor Productivity

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

This paper explored the effects of National Specially Monitored Firms (NSMF) program on corporate green total factor productivity (GTFP). It has certain practical implications. However, there are several problems in this paper, and I have to make the Major Revision decision.

1.The authors underdescribe the research motivation in the introduction section and do not explicitly mention the theoretical background.

2. I suggest that the authors should mainly explain the marginal contribution of this paper in the literature and theory.

3. I suggest that the authors add a research flowchart to the introduction section, so that the reader can clearly understand the research process of the paper.

4. In the theoretical analysis and literature review section, I suggest that the authors clearly elaborate the research hypotheses of this paper, and add a research framework diagram of the logical relationship between the variables.

5. The authors need to explain how the mechanistic variables were selected in the section of variables, and their descriptive statistical results.

6. Several literature may help the authors with university innovation efficiency, and I recommend add them to reference. DOI: 10.1007/s11356-023-28511-y; 10.1080/09640568.2023.2260556; 10.1016/j.jclepro.2021.126607; 10.1016/j.envres.2024.118295

7. The authors should add dialogue between existing studies to the analysis of empirical results and conclusions.

Comments on the Quality of English Language

The language of this article is not so good, and need to find an English native-speaker for comprehensive language editing.

Author Response

This paper explored the effects of National Specially Monitored Firms (NSMF) program on corporate green total factor productivity (GTFP). It has certain practical implications. However, there are several problems in this paper, and I have to make the Major Revision decision:

1.The authors underdescribe the research motivation in the introduction section and do not explicitly mention the theoretical background. 

Reply: In accordance with your recommendations, we have incorporated the theoretical background at the conclusion of the third paragraph and elaborated on the research motivation in the fourth paragraph of the Introduction section.

2.I suggest that the authors should mainly explain the marginal contribution of this paper in the literature and theory.

Reply: In response to your suggestions, we have revised the seventh and eighth paragraphs of the introduction to more clearly articulate the marginal contribution of this paper to both the literature and theoretical frameworks.

3.I suggest that the authors add a research flowchart to the introduction section, so that the reader can clearly understand the research process of the paper.

Reply: We have included a research framework diagram at the conclusion of Section 3, which illustrates the research process and delineates the logical relationships among the variables examined in the study.

4.In the theoretical analysis and literature review section, I suggest that the authors clearly elaborate the research hypotheses of this paper, and add a research framework diagram of the logical relationship between the variables.

Reply: In response to your suggestions, we have expanded the literature review and developed four hypotheses grounded in the preceding analysis:

H1: The NSMF program significantly enhances the GTFP of monitored firms.

H2a: The NSMF program enhances monitored firms’ GTFP by alleviating their financing constraints.

H2b: The NSMF program enhances monitored firms’ GTFP by improving their human capital.

H2c: The NSMF program enhances monitored firms’ GTFP by inducing increased use of pollution treatment technologies.

Additionally, we have included a research framework diagram at the end of Section 3 to illustrate the logical relationships among the variables analyzed in this study.

5.The authors need to explain how the mechanistic variables were selected in the section of variables, and their descriptive statistical results.

Reply: In accordance with your suggestions, we have detailed the selection process for the mechanistic variables in Section 3. Furthermore, we have included the specific mechanistic variables and their corresponding descriptive statistics in Section 4.3.3.

6.Several literature may help the authors with university innovation efficiency, and I recommend add them to reference. DOI: 10.1016/j.jclepro.2021.126607; 10.1016/j.envres.2024.118295

Reply: Thank you for your insightful suggestions. We have thoroughly reviewed the references you recommended and have integrated them into our manuscript, ensuring appropriate citation throughout the text.

7.The authors should add dialogue between existing studies to the analysis of empirical results and conclusions.

Reply: Thank you for your valuable suggestions. We have integrated a discussion of our contributions in relation to the existing literature in Sections 5.1 and 6.

Reviewer 2 Report

Comments and Suggestions for Authors

The paper is well-structured and addresses a relevant issue regarding environmental regulation and firm productivity. It makes a valuable contribution to an area often underexplored, and the methodology of time-varying DID seems appropriate for this analysis. The paper is solid, with clear results. However, there are some comments and suggestions: 

- The novelty of the study could be better emphasized in the introduction. For example, indicating an explicit statement of the research gap and potential policy implications of the findings (an essential aspect of sustainability research). 

- More details on the model's assumptions and any potential violation must be explained and addressed (accounting for policy implementation and its staggered nature).

- The mechanism analysis provides significant insights, but it is also relevant to briefly discuss some limitations or alternative explanations for the observed effects.

- In page 6-7. Can you better explain the Malmquist-Luenberger index and why you chose it for the context of Chinese industrial firms? Also, regional economic conditions may influence policy implementation and firm outcomes. It would be great to read a brief discussion on limitations and potential bias.

- The discussion on the negative weight problem could be expanded. I mean, why is it relevant? How does it affect the interpretation?

- The conclusion is ok. But I would love to see more about policy implications for sustainability practices, and maybe it would also be nice to add a paragraph indicating future research directions (other industries or environmental regulations?).

Comments on the Quality of English Language

Minor editing of English language required. But overall, it is well written.

Author Response

The paper is well-structured and addresses a relevant issue regarding environmental regulation and firm productivity. It makes a valuable contribution to an area often underexplored, and the methodology of time-varying DID seems appropriate for this analysis. The paper is solid, with clear results. However, there are some comments and suggestions:

Reply: We greatly appreciate the constructive comments made by you. We have revised the paper carefully according to your suggestions.

1.The novelty of the study could be better emphasized in the introduction. For example, indicating an explicit statement of the research gap and potential policy implications of the findings (an essential aspect of sustainability research). 

Reply: We have integrated your feedback and made corresponding revisions to the Introduction section. First, in the fifth paragraph, we have conducted a comprehensive review of the existing literature on the effects of the NSMF program on monitored firms and identified gaps in the research. Then we have articulated the importance of this study in advancing the understanding of sustainable development. Second, in the seventh paragraph, we have highlighted the potential policy implications of our findings, particularly in the context of promoting sustainable development.

2.More details on the model's assumptions and any potential violation must be explained and addressed (accounting for policy implementation and its staggered nature).

Reply: In response to your suggestions, we have elaborated on the application of a time-varying DID model in contrast to a traditional DID model in the first paragraph of Section 4.1. This revision highlights the time-varying DID model's enhanced suitability for analyzing policies implemented over multiple periods and its efficacy in addressing potential contemporaneous trends that may obscure the treatment effect.

3.The mechanism analysis provides significant insights, but it is also relevant to briefly discuss some limitations or alternative explanations for the observed effects.

Reply: In accordance with your suggestions, we have incorporated a discussion of the limitations related to the current mechanism analysis in Sections 6.1 and 6.3.

4.In page 6-7. Can you better explain the Malmquist-Luenberger index and why you chose it for the context of Chinese industrial firms? Also, regional economic conditions may influence policy implementation and firm outcomes. It would be great to read a brief discussion on limitations and potential bias.

Reply: In response to your suggestions, we have added an explanation of the Malmquist-Luenberger (ML) index and the justification for its use in measuring the green total factor productivity of Chinese industrial firms in the first paragraph of Section 4.3.1. Additionally, we have provided a detailed discussion on the influence of regional economic conditions on policy implementation and firm outcomes at the beginning of the second paragraph in Section 4.3.2.

5.The discussion on the negative weight problem could be expanded. I mean, why is it relevant? How does it affect the interpretation?

Reply: In response to your suggestions, we have included a discussion on the significance of the issue of “negative weights” and its specific implications for time-varying DID estimation in the first paragraph of Section 5.4.

6.The conclusion is ok. But I would love to see more about policy implications for sustainability practices, and maybe it would also be nice to add a paragraph indicating future research directions (other industries or environmental regulations?).

Reply: In response to your suggestions, we have refined the policy implications in the Conclusions section to better align with the principles of sustainable development. Additionally, we have included a discussion of the study’s limitations and potential avenues for future research.

7.Minor editing of English language required. But overall, it is well written

Reply: We appreciate your valuable suggestion. In response, we have conducted a thorough proofreading of the manuscript, addressing all typographical and grammatical errors to ensure linguistic accuracy. Additionally, we have engaged a professional editing agency to further enhance the language and overall presentation of our manuscript.

 

Reviewer 3 Report

Comments and Suggestions for Authors

The abstract can show the study originality and value for stakeholders.

References not based on the journal style.

Also, the introduction section is missing the paper contributions and implications.

The literature can be extended to develop the study hypotheses.

The paper can be better organized or structured. For example, section 2.2 can be section 2 and followed by literature review section.

Section 6 should be extended to discuss the paper contributions relative to the existing studies in the literature.

Finally, this section should highlight the paper implications, limitations and suggestions for future research.

Comments on the Quality of English Language

Good.

Author Response

Comments and Suggestions for Authors:

1.The abstract can show the study originality and value for stakeholders.

Reply: We have integrated your suggestions by adding a discussion in the abstract that highlights the paper’s originality and its significance for stakeholders, particularly emphasizing its relevance to sustainable development.

2.References not based on the journal style.

Reply: Thank you for your suggestions. We have adjusted the references on the journal style.

3.Also, the introduction section is missing the paper contributions and implications.

Reply: We have revised paragraphs 7 through 8 in the Introduction section to offer a more precise summary of the paper’s contributions and impacts. In particular, paragraph 7 now underscores the potential policy implications of the findings, with a specific emphasis on their relevance to sustainable development.

4.The literature can be extended to develop the study hypotheses.

Reply: In response to your suggestions, we have expanded the literature review and developed four hypotheses grounded in the preceding analysis:

H1: The NSMF program significantly enhances the GTFP of monitored firms.

H2a: The NSMF program enhances monitored firms’ GTFP by alleviating their financing constraints.

H2b: The NSMF program enhances monitored firms’ GTFP by improving their human capital.

H2c: The NSMF program enhances monitored firms’ GTFP by inducing increased use of pollution treatment technologies.

5.The paper can be better organized or structured. For example, section 2.2 can be section 2 and followed by literature review section.

Reply: Based on your suggestions, we have restructured the paper as follows: Section 2 provides the policy background, Section 3 reviews the literature and outlines the research hypotheses, Section 4 details the dataset, model, and variables, followed by the empirical findings in Section 5. Section 6 examines the mechanisms, and Section 7 concludes with final remarks.

6.Section 6 should be extended to discuss the paper contributions relative to the existing studies in the literature.

Reply: Thank you for your insightful suggestions. In response, we have incorporated a discussion of the paper’s contributions relative to the existing literature in the Conclusions section.

7.Finally, this section should highlight the paper implications, limitations and suggestions for future research.

Reply: In response to your suggestions, we have refined the policy implications in the Conclusions section to more closely align with the principles of sustainable development. Furthermore, we have added a discussion of the study’s limitations and identified avenues for future research.

Reviewer 4 Report

Comments and Suggestions for Authors

I am pleased to be carrying out the review of the document titled “ The Effect of National Specially Monitored Firms Program on 2 Water-polluting Firms’ Green Total Factor Productivity”.  The content is well contextualized within the existing theoretical and empirical research. The authors provide a detailed literature review that highlights the importance of environmental regulations on firms' productivity, with a specific focus on China's National Specially Monitored Firms (NSMF) program. They effectively link their research to gaps in the current literature, particularly the need for further investigation into the impact of the NSMF on green total factor productivity (GTFP). However, while the content is comprehensive, there are instances where the discussion could be more concise, particularly in the literature review and background sections. Redundant explanations could be trimmed to enhance readability and focus.

The research design is clearly articulated, with the authors employing a time-varying difference-in-differences (DID) model to evaluate the impact of the NSMF program. The research questions and hypotheses are explicitly stated, focusing on whether the NSMF promotes GTFP and through which channels. The methodology is robust, with a detailed explanation of the data sources, variable selection, and econometric model used. The presentation of the model and variables is precise, making it easy to follow the analytical approach.

The arguments and discussion of findings are generally coherent and compelling. The authors systematically present their empirical results, supporting their hypotheses with evidence. The use of parallel trend tests, placebo tests, and robustness checks strengthens the validity of the findings. However, the discussion could benefit from a more balanced consideration of potential limitations or alternative interpretations of the results. While the findings are well-supported, acknowledging and addressing possible counterarguments or limitations would enhance the overall persuasiveness of the discussion.

The empirical results are clearly presented, with tables and figures effectively used to illustrate the findings. The baseline regression results are thoroughly discussed, and the subsequent robustness checks and mechanism analysis are well-structured. The use of various econometric techniques to validate the findings demonstrates a rigorous approach. The figures used in the parallel trend tests and placebo tests are particularly helpful in visualizing the results, aiding in the reader's understanding of the analysis.

The article is adequately referenced, with citations provided for all major claims and references to previous studies. The authors draw on a wide range of relevant literature to contextualize their research, and the references are up-to-date and pertinent to the topic. The referencing style is consistent and adheres to academic standards. However, there are a few instances where additional citations could enhance the credibility of certain statements, particularly in the discussion of the NSMF program's broader implications.

The conclusions are well-supported by the results presented in the article. The authors summarize their findings effectively, reiterating the key points from their empirical analysis. The connection between the results and the conclusions is clear, and the policy implications derived from the findings are logically developed. The study’s contribution to the literature is clearly articulated, with the conclusions grounded in the evidence provided throughout the paper.

The article provides a comprehensive and well-contextualized exploration of the impact of China's National Specially Monitored Firms (NSMF) program on green total factor productivity (GTFP), effectively situating the research within existing theoretical and empirical literature. The authors clearly articulate their research design, questions, hypotheses, and methods, employing a time-varying difference-in-differences (DID) model to investigate the program's effects. The study is rigorous, with the results presented clearly and validated through various econometric techniques, including parallel trend tests, placebo tests, and robustness checks. The arguments and discussion of findings are generally coherent and compelling, though the paper could benefit from a more balanced discussion that considers potential limitations or alternative interpretations. While the article is adequately referenced, a few additional citations could strengthen the credibility of certain broader claims. The conclusions are well-supported by the empirical results and are logically connected to the policy implications discussed.

However, one critical aspect that the authors do not fully address is why this article should interest the international audience of the journal, especially in relation to sustainability. While the paper makes a significant contribution to understanding environmental regulation's impact on firm productivity in developing economies, the discussion would be enhanced by explicitly connecting the findings to global sustainability challenges. By framing the research within the broader context of international environmental policy and sustainability goals, the authors could better demonstrate the relevance of their findings to a global audience. This connection would underscore the importance of the study not only for China but for other nations seeking to balance economic development with environmental protection, thereby aligning the article more closely with the journal's focus on sustainability.

Author Response

Comments and Suggestions for Authors:

1.I am pleased to be carrying out the review of the document titled “ The Effect of National Specially Monitored Firms Program on 2 Water-polluting Firms’ Green Total Factor Productivity”.  The content is well contextualized within the existing theoretical and empirical research. The authors provide a detailed literature review that highlights the importance of environmental regulations on firms' productivity, with a specific focus on China's National Specially Monitored Firms (NSMF) program. They effectively link their research to gaps in the current literature, particularly the need for further investigation into the impact of the NSMF on green total factor productivity (GTFP). However, while the content is comprehensive, there are instances where the discussion could be more concise, particularly in the literature review and background sections. Redundant explanations could be trimmed to enhance readability and focus.

Reply: Thank you for your valuable suggestions on our paper. In response, we have streamlined the literature review and background sections, removing redundant explanations to enhance readability and more effectively emphasize the key points.

2.The research design is clearly articulated, with the authors employing a time-varying difference-in-differences (DID) model to evaluate the impact of the NSMF program. The research questions and hypotheses are explicitly stated, focusing on whether the NSMF promotes GTFP and through which channels. The methodology is robust, with a detailed explanation of the data sources, variable selection, and econometric model used. The presentation of the model and variables is precise, making it easy to follow the analytical approach.

Reply: Thank you for your affirmation on our research design.  

3.The arguments and discussion of findings are generally coherent and compelling. The authors systematically present their empirical results, supporting their hypotheses with evidence. The use of parallel trend tests, placebo tests, and robustness checks strengthens the validity of the findings. However, the discussion could benefit from a more balanced consideration of potential limitations or alternative interpretations of the results. While the findings are well-supported, acknowledging and addressing possible counterarguments or limitations would enhance the overall persuasiveness of the discussion.

Reply: In response to your suggestions, we have formulated four hypotheses informed by the preceding literature review. Furthermore, we have introduced a discussion on the limitations of the current mechanism analysis in Sections 6.1 and 6.3. Lastly, we have included a thorough discussion of the study’s limitations and potential avenues for future research at the end of the Conclusions section.

4.The empirical results are clearly presented, with tables and figures effectively used to illustrate the findings. The baseline regression results are thoroughly discussed, and the subsequent robustness checks and mechanism analysis are well-structured. The use of various econometric techniques to validate the findings demonstrates a rigorous approach. The figures used in the parallel trend tests and placebo tests are particularly helpful in visualizing the results, aiding in the reader's understanding of the analysis.

Reply: Thank you for your affirmation on our empirical research and result visualization.

5.The article is adequately referenced, with citations provided for all major claims and references to previous studies. The authors draw on a wide range of relevant literature to contextualize their research, and the references are up-to-date and pertinent to the topic. The referencing style is consistent and adheres to academic standards. However, there are a few instances where additional citations could enhance the credibility of certain statements, particularly in the discussion of the NSMF program's broader implications.

Reply: In response to your suggestions, we have incorporated additional references in the Policy Background section to more comprehensively address the broader implications of the NSMF program, thereby enhancing the credibility and substantiation of key statements.

6.The conclusions are well-supported by the results presented in the article. The authors summarize their findings effectively, reiterating the key points from their empirical analysis. The connection between the results and the conclusions is clear, and the policy implications derived from the findings are logically developed. The study’s contribution to the literature is clearly articulated, with the conclusions grounded in the evidence provided throughout the paper.

Reply: We appreciate your positive feedback. In response, we have further revised the Conclusions section to enhance the discussion of our contributions in relation to the existing literature. Additionally, we have refined the policy implications to more closely align with sustainable development principles and included a discussion on the study’s limitations, along with potential avenues for future research.

 7.The article provides a comprehensive and well-contextualized exploration of the impact of China's National Specially Monitored Firms (NSMF) program on green total factor productivity (GTFP), effectively situating the research within existing theoretical and empirical literature. The authors clearly articulate their research design, questions, hypotheses, and methods, employing a time-varying difference-in-differences (DID) model to investigate the program's effects. The study is rigorous, with the results presented clearly and validated through various econometric techniques, including parallel trend tests, placebo tests, and robustness checks. The arguments and discussion of findings are generally coherent and compelling, though the paper could benefit from a more balanced discussion that considers potential limitations or alternative interpretations. While the article is adequately referenced, a few additional citations could strengthen the credibility of certain broader claims. The conclusions are well-supported by the empirical results and are logically connected to the policy implications discussed.

Reply: We have included discussions on the limitations of the current mechanism analysis in Sections 6.1 and 6.3. Furthermore, we have incorporated additional references to strengthen the credibility of our statements concerning the broader implications of the NSMF program.

 8.However, one critical aspect that the authors do not fully address is why this article should interest the international audience of the journal, especially in relation to sustainability. While the paper makes a significant contribution to understanding environmental regulation's impact on firm productivity in developing economies, the discussion would be enhanced by explicitly connecting the findings to global sustainability challenges. By framing the research within the broader context of international environmental policy and sustainability goals, the authors could better demonstrate the relevance of their findings to a global audience. This connection would underscore the importance of the study not only for China but for other nations seeking to balance economic development with environmental protection, thereby aligning the article more closely with the journal's focus on sustainability.

Reply: We have integrated empirical insights into strategies for achieving sustainable development at the end of the abstract, as well as within the Introduction and Conclusions sections. These insights offer valuable guidance for the future evolution of similar regulations in developing countries and provide practical pathways for firms and society to pursue sustainable development. Additionally, we have proposed feasible policy recommendations for governments in developing countries to promote corporate sustainable development through the implementation of analogous command-and-control regulations.

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

 

The authors have done a lot of revision work, and the quality of the paper has reached a publishable level.  However, I would still recommend that the authors refine the section of conclusion and discussion, particularly the policy implications, and clarify their operability.

 

Author Response

The authors have done a lot of revision work, and the quality of the paper has reached a publishable level.  However, I would still recommend that the authors refine the section of conclusion and discussion, particularly the policy implications, and clarify their operability.

Reply: In accordance with your recommendations, we have further refined the Conclusions sections. Specifically, the first point of the results discussion now includes an examination of the interplay between the baseline regression results and the Porter hypothesis. The second point highlights the importance of accounting for the incentive effects on various mechanisms of GTFP growth when designing policy interventions. The third point has been expanded to address the dual benefits of the NSMF program, emphasizing its positive effect on both the economic and environmental performance of firms. Additionally, we have revised the policy implications to improve its thoroughness and clarify their operability.

Reviewer 3 Report

Comments and Suggestions for Authors

I see the authors have made the revision as requested.

Comments on the Quality of English Language

Good.

Author Response

I see the authors have made the revision as requested.

Reply: Thank you for your positive feedback on our article. We have further refined the Conclusions section to clarify the operability of the policy implications.