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Does Energy Efficiency Benefit from Foreign Direct Investment Technology Spillovers? Evidence from the Manufacturing Sector in Guangdong, China

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  • Rui Zhang

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

  • Chongqi Zhang

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

Abstract

Given that energy is a significant input factor for modern economic growth, which has also brought the most severe negative externalities damage to the environment, improving energy efficiency is considered critical globally. As a large energy producer and consumer, China faces challenges from both the economy and the environment. This study used the generalized method of moments estimation techniques to examine the impact of foreign direct investment (FDI) technology spillovers on energy efficiency in a sample of manufacturing industries. A super-efficient data envelopment measure of energy efficiency is examined. The novelty of this study is that it analyzes both the quantitative and qualitative values of various spillover effects at the industry level. Using a panel data set on 26 manufacturing industries in Guangdong Province of China covering the period 2000–2018, the empirical results show a positive and statistically significant relationship between FDI competitive effects and energy efficiency. In contrast, this relationship is in the opposite position when demonstration effects of FDI technology spillovers occur. The results also show these effects have more impact to the low or middle energy consumption industries. The study provides a reference for the formulation of the FDI strategy and energy policy in the manufacturing sector.

Suggested Citation

  • Rui Zhang & Chongqi Zhang, 2022. "Does Energy Efficiency Benefit from Foreign Direct Investment Technology Spillovers? Evidence from the Manufacturing Sector in Guangdong, China," Sustainability, MDPI, vol. 14(3), pages 1-18, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1421-:d:734793
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    References listed on IDEAS

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    1. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
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    1. Dossou, Toyo Amègnonna Marcel & Ndomandji Kambaye, Emmanuelle & Asongu, Simplice A. & Alinsato, Alastaire Sèna & Berhe, Mesfin Welderufael & Dossou, Kouessi Pascal, 2023. "Foreign direct investment and renewable energy development in sub-saharan Africa: Does governance quality matter?," Renewable Energy, Elsevier, vol. 219(P1).
    2. Jianbo Dong & Min Zhang & Guangbin Cheng, 2022. "Impacts of Upgrading of Consumption Structure and Human Capital Level on Carbon Emissions—Empirical Evidence Based on China’s Provincial Panel Data," Sustainability, MDPI, vol. 14(19), pages 1-17, September.
    3. Xiaodi Yang & Di Wang, 2022. "Heterogeneous Environmental Regulation, Foreign Direct Investment, and Regional Carbon Dioxide Emissions: Evidence from China," Sustainability, MDPI, vol. 14(11), pages 1-19, May.

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