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The Impact of Outward Foreign Direct Investment on Carbon Emission toward China’s Sustainable Development

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  • Feifei Tan

    (Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China
    State Key Laboratory of Pollution Control and Resource Reuse, School of the Environment, Nanjing University, Nanjing 210046, China)

  • Hao Wan

    (Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China)

  • Xiangjun Jiang

    (Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China)

  • Zhiyuan Niu

    (School of Environmental Science, Nanjing Xiaozhuang University, Nanjing 211171, China)

Abstract

It is of practical significance to evaluate whether enhancing outward foreign direct investment (OFDI) can promote carbon mitigation under the new urbanization background toward China’s sustainable development and carbon neutrality. The impact of OFDI on carbon emissions is investigated from the dual perspectives of the urbanization threshold and the mediating path by using panel data from China’s 30 provinces during the period of 2003–2015 and considering both population and land. The results show that there is a significant impact from interprovincial OFDI on CO 2 emissions with the double threshold effect of urbanization, and that OFDI expansion will increase CO 2 emissions with urbanization; however, the different stages of urbanization show inverted U-shaped characteristics that first rise and then fall. The optimization of industrial structures has not passed the mediating effects test during the sample period, while the rationalization of the industrial structure provides a mediating effect in the primary stage of urbanization and a suppressing effect in the high level stage of urbanization. Import dependence only shows a masking effect in the intermediate stage of urbanization, while the technical level shows an intermediary effect in the primary stage of urbanization and a masking effect in the intermediate stage. The intensification of OFDI has brought different effects on economic and social production in various regions of China under urbanization, which has further affected regional carbon emissions. Discussing these effects would help to provide constructive suggestions for the regional coordination of development, new urbanization construction and urban low carbon transformation.

Suggested Citation

  • Feifei Tan & Hao Wan & Xiangjun Jiang & Zhiyuan Niu, 2021. "The Impact of Outward Foreign Direct Investment on Carbon Emission toward China’s Sustainable Development," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11605-:d:660936
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    Cited by:

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    2. Pengfei Cheng & Xingang Huan & Baekryul Choi, 2022. "The Comprehensive Impact of Outward Foreign Direct Investment on China’s Carbon Emissions," Sustainability, MDPI, vol. 14(23), pages 1-16, December.
    3. Xinwei Zhao & Xinsong Yang & Geng Peng & Shengjie Yue, 2023. "International Trade and Carbon Emissions: Evaluating the Role of Trade Rule Uncertainty," Sustainability, MDPI, vol. 15(15), pages 1-19, July.
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    5. Shuxin Mao & Hongbing Deng, 2022. "Regional Ecology Supporting Sustainable Development," Sustainability, MDPI, vol. 14(12), pages 1-5, June.

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