Abstract: The existing literature ignores the close relationship between private investment and the realization of Porter's hypothesis. In this paper, the green total factor productivity is measured by the direction distance function using data from China at the provincial level for the period 2007—2017. Furthermore, taking private investment as intermediary variable and threshold variable, the relationship among environmental regulation, private investment and green total factor productivity is studied. The results show that: firstly, there is a U-shaped relationship between environmental regulation and green total factor productivity, and improving the intensity of environmental regulation can promote the green total factor productivity. Secondly, the mediating effect of “environmental regulation→private investment→green total factor productivity” is significant, and there is a U-shaped relationship between environmental regulation and private investment, increasing private investment can promote green total factor productivity. Thirdly, private investment also has threshold effect, when the level of private investment is low, environmental regulation and green total factor productivity are negatively correlated or not significant. Only when the level of private investment is high, environmental regulation can significantly promote green total factor productivity. The results show that the development of private investment is the necessary premise to promote the realization of Porter hypothesis.

Key words: environmental regulation; private investment; green total factor productivity; intermediary effect; threshold effect