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Research on the Impact Factors of Green Economy of China—From the Perspective of System and Foreign Direct Investment

Author

Listed:
  • Bohan Chai

    (Business School, University of Shanghai for Science and Technology, Shanghai 200093, China)

  • Junwei Gao

    (Business School, University of Shanghai for Science and Technology, Shanghai 200093, China)

  • Lingying Pan

    (Business School, University of Shanghai for Science and Technology, Shanghai 200093, China)

  • Yishu Chen

    (Business School, University of Shanghai for Science and Technology, Shanghai 200093, China)

Abstract

The outbreak of COVID-19 has had an immeasurable impact on the global economy. It has damaged parts of the real economy, but also provided new opportunities for China’s green development. Both the system and foreign direct investment (FDI) have an important impact on China’s green recovery path. Based on the provincial panel data of China from 2007 to 2016, this paper uses a slacks-based measure (SBM) model and Malmquist–Luenberger (ML) index to measure the green total factor productivity (GTFP), and empirically analyzes the regulatory role of system in the influencing mechanism of FDI on GTFP. The results show that the overall level of FDI significantly inhibits the improvement of GTFP, and the interaction between system and FDI makes it shift from inhibition to promotion, but the promotion would be weakened with the improvement of the system. FDI in the eastern region shows a positive effect on GTFP, which will be weakened with the improvement of the system. FDI in central and western regions shows a negative effect on GTFP, and the negative effect in western regions will be increased with the improvement of the system. Then this article puts forward targeted policy suggestions for further improving the level of regional systems and introducing FDI of high quality.

Suggested Citation

  • Bohan Chai & Junwei Gao & Lingying Pan & Yishu Chen, 2021. "Research on the Impact Factors of Green Economy of China—From the Perspective of System and Foreign Direct Investment," Sustainability, MDPI, vol. 13(16), pages 1-18, August.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:16:p:8741-:d:608779
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    2. Yixing Sun & Mingyang Zhang & Yicheng Zhu, 2023. "Do Foreign Direct Investment Inflows in the Producer Service Sector Promote Green Total Factor Productivity? Evidence from China," Sustainability, MDPI, vol. 15(14), pages 1-19, July.

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