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Exploring the Role of Foreign Direct Investment and Environmental Regulation in Regional Ecological Efficiency in the Context of Sustainable Development

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  • Yumei Wu

    (School of Economics and Management, Nanjing Institute of Technology, Nanjing 211167, China)

  • Rong Wang

    (Business School, Nanjing Xiaozhuang University, Nanjing 211171, China)

  • Fayuan Wang

    (School of Economics and Management, Yangtze University, Jingzhou 434023, China)

Abstract

Eco-efficiency (EE) is an important indicator of regional sustainable development, which reflects the efficiency of regional economic development in using resources effectively to reduce environmental pressures, and foreign direct investment and environmental regulation are very important in promoting regional economic growth and enhancing eco-efficiency. In this paper, we chose China’s panel data from 2009 to 2021, measured China’s regional eco-efficiency using the super-efficient SBM model, and explored environmental regulation and the impact of FDI on EE in different regions using the Tobit model, with conclusions as follows: (1) The average value of national EE in China during 2009–2021 was about 0.631, which was at a low level, and there were significant differences between regions, with the highest EE in the eastern region, and the central and western regions being lower than the national average. (2) FDI at the national level had a significant promoting effect on regional EE, with an elasticity coefficient of 0.0213, which verifies that the “pollution paradise” effect does not exist at national level. FDI promoted EE in the eastern region, while not being significant in the other two regions. The impact of the environmental regulation act on EE at the national level did not pass the significance test, but the impact passed the significance test with positive coefficients for both the eastern and central regions, while in the western region it was not significant. (3) Financial investment in science and technology promoted EE in the national, east, and central regions significantly, while not being significant in the western region. The economic development level of all regions was positively correlated with EE; the impact of urbanization on EE was significantly positive in national, central, and western regions, but was not significant in the eastern region. The industrial structure of all regions was not conducive to the improvement of EE, with the western region having the most negative impact on EE. The study in this paper represents an important addition and refinement to research in related fields.

Suggested Citation

  • Yumei Wu & Rong Wang & Fayuan Wang, 2023. "Exploring the Role of Foreign Direct Investment and Environmental Regulation in Regional Ecological Efficiency in the Context of Sustainable Development," Sustainability, MDPI, vol. 15(11), pages 1-19, June.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:11:p:9104-:d:1164144
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