IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v145y2020ics0301421520304560.html
   My bibliography  Save this article

The effects of outward foreign direct investment and reverse technology spillover on China's carbon productivity

Author

Listed:
  • Pan, Xiongfeng
  • Li, Mengna
  • Wang, Mengyang
  • Chu, Junhui
  • Bo, Hongguang

Abstract

Under the background of substantial outward foreign direct investment (OFDI) from China to other countries, it is of great practical significance to examine whether OFDI of China brings green spillovers towards the home country. In view of the lack of in-depth research on the effect of reverse technology spillovers of OFDI on China's carbon productivity, this paper attempts to fill the research gap. Based on a panel dataset involving 30 provinces, this paper calculated the provincial total factor carbon productivity (TFCP) for the period of 2004–2016, and used the Spatial Durbin Model (SDM) to examine the effect of reverse technology spillovers of OFDI on TFCP. The results show that reverse technology spillovers of China's OFDI can significantly promote the growth of TFCP, and the reverse technology spillovers of OFDI has a positive effect on the improvement of TFCP by promoting the technological capabilities of the region. The reverse technology spillovers of OFDI can increase the TFCP of neighboring provinces through the spatial spillover mechanism. Additionally, there exists regional heterogeneity in the effects of the reverse technology spillovers of OFDI on TFCP. The reverse technology spillovers of OFDI has a positive impact on TFCP in the eastern and economically developed regions, and the spillover effect is not significant in the central and western regions and underdeveloped regions.

Suggested Citation

  • Pan, Xiongfeng & Li, Mengna & Wang, Mengyang & Chu, Junhui & Bo, Hongguang, 2020. "The effects of outward foreign direct investment and reverse technology spillover on China's carbon productivity," Energy Policy, Elsevier, vol. 145(C).
    • Handle: RePEc:eee:enepol:v:145:y:2020:i:c:s0301421520304560
    DOI: 10.1016/j.enpol.2020.111730
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421520304560
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2020.111730?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Piperopoulos, Panagiotis & Wu, Jie & Wang, Chengqi, 2018. "Outward FDI, location choices and innovation performance of emerging market enterprises," Research Policy, Elsevier, vol. 47(1), pages 232-240.
    2. Holger Görg & David Greenaway, 2016. "Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 9, pages 163-189, World Scientific Publishing Co. Pte. Ltd..
    3. Walheer, Barnabé & Zhang, Linjia & Luo, Yingchan, 2020. "Bidirectional technological spillover in the Chinese star-rated hotel sector: An empirical investigation," Economic Modelling, Elsevier, vol. 86(C), pages 210-226.
    4. Kogut, Bruce & Chang, Sea Jin, 1991. "Technological Capabilities and Japanese Foreign Direct Investment in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 401-413, August.
    5. Zhang, Lulu & Xiong, Lichun & Cheng, Baodong & Yu, Chang, 2018. "How does foreign trade influence China’s carbon productivity? Based on panel spatial lag model analysis," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 171-179.
    6. Stiebale, Joel, 2013. "The impact of cross-border mergers and acquisitions on the acquirers' R&D — Firm-level evidence," International Journal of Industrial Organization, Elsevier, vol. 31(4), pages 307-321.
    7. Jaya Prakash Pradhan & Neelam Singh, 2009. "Outward FDI and Knowledge Flows: A Study of the Indian Automotive Sector," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 1(1), pages 156-187, June.
    8. Muhammad Ali & Uwe Cantner & Ipsita Roy, 2017. "Knowledge Spillovers Through FDI and Trade: The Moderating Role of Quality-Adjusted Human Capital," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 357-391, Springer.
    9. Pavlik, Jamie Bologna & Young, Andrew T., 2019. "Did technology transfer more rapidly East–West than North–South?," European Economic Review, Elsevier, vol. 119(C), pages 216-235.
    10. Chunlai Chen, 2018. "Impact of China's Outward Foreign Direct Investment on Its Regional Economic Growth," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(3), pages 1-21, May.
    11. Georges Siotis, 1999. "Foreign Direct Investment Strategies and Firms' Capabilities," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(2), pages 251-270, June.
    12. Cui, Lin & Meyer, Klaus E. & Hu, Helen Wei, 2014. "What drives firms’ intent to seek strategic assets by foreign direct investment? A study of emerging economy firms," Journal of World Business, Elsevier, vol. 49(4), pages 488-501.
    13. Hao, Yu & Guo, Yunxia & Guo, Yitong & Wu, Haitao & Ren, Siyu, 2020. "Does outward foreign direct investment (OFDI) affect the home country’s environmental quality? The case of China," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 109-119.
    14. Pan, Xiongfeng & Uddin, Md. Kamal & Han, Cuicui & Pan, Xianyou, 2019. "Dynamics of financial development, trade openness, technological innovation and energy intensity: Evidence from Bangladesh," Energy, Elsevier, vol. 171(C), pages 456-464.
    15. Head, C. Keith & Ries, John C. & Swenson, Deborah L., 1999. "Attracting foreign manufacturing: Investment promotion and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 197-218, March.
    16. Songping Zhu & Azhong Ye, 2018. "Does the Impact of China’s Outward Foreign Direct Investment on Reverse Green Technology Process Differ across Countries?," Sustainability, MDPI, vol. 10(11), pages 1-19, October.
    17. Song, Malin & Wang, Jianlin, 2018. "Environmental efficiency evaluation of thermal power generation in China based on a slack-based endogenous directional distance function model," Energy, Elsevier, vol. 161(C), pages 325-336.
    18. Pan, Xiongfeng & Uddin, Md. Kamal & Saima, Umme & Jiao, Zhiming & Han, Cuicui, 2019. "How do industrialization and trade openness influence energy intensity? Evidence from a path model in case of Bangladesh," Energy Policy, Elsevier, vol. 133(C).
    19. Liu, Zuankuo & Xin, Li, 2019. "Has China's Belt and Road Initiative promoted its green total factor productivity？——Evidence from primary provinces along the route," Energy Policy, Elsevier, vol. 129(C), pages 360-369.
    20. Muhammad Zubair Mumtaz & Zachary Alexander Smith, 2018. "The Determinants of Chinese Outward Foreign Direct Investment: A Closer Look," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 13(4), pages 577-601, December.
    21. Liu, Chang & Hong, Tao & Li, Huaifeng & Wang, Lili, 2018. "From club convergence of per capita industrial pollutant emissions to industrial transfer effects: An empirical study across 285 cities in China," Energy Policy, Elsevier, vol. 121(C), pages 300-313.
    22. Zeng, Ka & Eastin, Joshua, 2012. "Do Developing Countries Invest Up? The Environmental Effects of Foreign Direct Investment from Less-Developed Countries," World Development, Elsevier, vol. 40(11), pages 2221-2233.
    23. Meng, Ming & Niu, Dongxiao, 2012. "Three-dimensional decomposition models for carbon productivity," Energy, Elsevier, vol. 46(1), pages 179-187.
    24. Wang, Cassandra C. & Wu, Aiqi, 2016. "Geographical FDI knowledge spillover and innovation of indigenous firms in China," International Business Review, Elsevier, vol. 25(4), pages 895-906.
    25. David B. Audretsch & Maksim Belitski & Rosa Caiazza & Erik E. Lehmann, 2020. "Knowledge management and entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 16(2), pages 373-385, June.
    26. Bruno Van Pottelsberghe De La Potterie & Frank Lichtenberg, 2001. "Does Foreign Direct Investment Transfer Technology Across Borders?," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 490-497, August.
    27. Xiongfeng Pan & Jing Zhang & Malin Song & Bowei Ai, 2018. "Innovation resources integration pattern in high-tech entrepreneurial enterprises," International Entrepreneurship and Management Journal, Springer, vol. 14(1), pages 51-66, March.
    28. Ke Wang & Yujiao Xian & Yi-Ming Wei & Zhimin Huang, 2016. "Sources of carbon productivity change: A decomposition and disaggregation analysis based on global Luenberger productivity indicator and endogenous directional distance function," CEEP-BIT Working Papers 91, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    29. Du, Kerui & Li, Jianglong, 2019. "Towards a green world: How do green technology innovations affect total-factor carbon productivity," Energy Policy, Elsevier, vol. 131(C), pages 240-250.
    30. Anderson, John & Sutherland, Dylan, 2015. "Entry mode and emerging market MNEs: An analysis of Chinese greenfield and acquisition FDI in the United States," Research in International Business and Finance, Elsevier, vol. 35(C), pages 88-103.
    31. Huang, Junbing & Du, Dan & Tao, Qizhi, 2017. "An analysis of technological factors and energy intensity in China," Energy Policy, Elsevier, vol. 109(C), pages 1-9.
    32. Xiongfeng Pan & Jing Zhang & Changyu Li & Rong Quan & Bin Li, 2018. "Exploring Dynamic Impact of Foreign Direct Investment on China’s CO $$_{2}$$ 2 Emissions Using Markov-Switching Vector Error Correction Model," Computational Economics, Springer;Society for Computational Economics, vol. 52(4), pages 1139-1151, December.
    33. Poumanyvong, Phetkeo & Kaneko, Shinji, 2010. "Does urbanization lead to less energy use and lower CO2 emissions? A cross-country analysis," Ecological Economics, Elsevier, vol. 70(2), pages 434-444, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Wenyue & Li, Jianan & Sun, Chuanwang, 2022. "The impact of OFDI reverse technology spillovers on China's energy intensity: Analysis of provincial panel data," Energy Economics, Elsevier, vol. 116(C).
    2. Zhang, Wenyue & Sun, Chuanwang, 2024. "Do multinational enterprises’ overseas investment activities promote their green transition performance? Evidence from Chinese listed companies," Structural Change and Economic Dynamics, Elsevier, vol. 71(C), pages 594-608.
    3. Qizhen Wang & Rong Wang & Suxia Liu, 2024. "The reverse technology spillover effect of outward foreign direct investment, energy efficiency and carbon emissions," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(7), pages 17013-17035, July.
    4. Zhijun Feng & Bo Zeng & Qian Ming, 2018. "Environmental Regulation, Two-Way Foreign Direct Investment, and Green Innovation Efficiency in China’s Manufacturing Industry," IJERPH, MDPI, vol. 15(10), pages 1-22, October.
    5. Yong He & Hongyan Zuo & Nuo Liao, 2023. "Assessing the impact of reverse technology spillover of outward foreign direct investment on energy efficiency," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(5), pages 4385-4410, May.
    6. Xiaoxu Dong & Cheon Yu & Yun Seop Hwang, 2021. "The Effects of Reverse Knowledge Spillover on China’s Sustainable Development: Sustainable Development Indicators Based on Institutional Quality," Sustainability, MDPI, vol. 13(4), pages 1-17, February.
    7. Yang, Zhenbing & Chen, Zhuo & Shi, Qi & Yan, Bing, 2021. "Does outward foreign direct investment increase debt ratio? Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 1-12.
    8. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    9. Imran Shah & Linyu He & Richard Hatfield & Mohamed Haroon, 2020. "Outward FDI: National and Regional Policy Implications for Technology Innovation," Department of Economics Working Papers 77/20, University of Bath, Department of Economics.
    10. Sourafel Girma, 2005. "Absorptive Capacity and Productivity Spillovers from FDI: A Threshold Regression Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(3), pages 281-306, June.
    11. Li, Mengna & Pan, Xiongfeng & Yuan, Sai, 2022. "Do the national industrial relocation demonstration zones have higher regional energy efficiency?," Applied Energy, Elsevier, vol. 306(PA).
    12. Yuan Zhao & Tian Zhang & Ting Wu & Shujing Xu & Shuwang Yang, 2021. "Effects of Technological Progress from Different Sources on Haze Pollution in China," Sustainability, MDPI, vol. 13(5), pages 1-18, March.
    13. Hejazi, Walid & Tang, Jianmin & Wang, Weimin, 2023. "Absorptive capacity, learning and profiting from outward FDI: Evidence from Canadian firms," Journal of World Business, Elsevier, vol. 58(3).
    14. Zhang, Weiwei & Zhang, Shijin & Chen, Fu & Wang, Yuan & Zhang, Yichi, 2023. "Does Chinese companies' OFDI enhance their own green technology innovation?," Finance Research Letters, Elsevier, vol. 56(C).
    15. Pierre Blanchard & Claude Mathieu, 2016. "Multinationals and domestic firms in France: who gains from knowledge spillovers?," Review of Agricultural, Food and Environmental Studies, Springer, vol. 97(2), pages 109-125, September.
    16. Nigel Driffield & James H. Love & Karl Taylor, 2009. "Productivity And Labour Demand Effects Of Inward And Outward Foreign Direct Investment On Uk Industry," Manchester School, University of Manchester, vol. 77(2), pages 171-203, March.
    17. Chiara Franco & Francesco Rentocchini & Giuseppe Vittucci Marzetti, 2008. "Why do firms invest abroad? An analysis of the motives underlying Foreign Direct Investments," Department of Economics Working Papers 0817, Department of Economics, University of Trento, Italia.
    18. Jianlong Wang & Haitao Wu & Yong Liu & Weilong Wang, 2024. "Going out and bringing in: Exploring the impact of OFDI on green innovation performance under firms' digital transformation strategies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2428-2442, June.
    19. Ben Ferrett, 2012. "Acquisition versus Green eld Investment versus Export in an International Oligopoly with Heterogeneous Firms," Discussion Paper Series 2012_03, Department of Economics, Loughborough University, revised Apr 2012.
    20. Nigel Driffield & James H. Love, 2003. "Foreign Direct Investment, Technology Sourcing and Reverse Spillovers," Manchester School, University of Manchester, vol. 71(6), pages 659-672, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:145:y:2020:i:c:s0301421520304560. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.