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Outward foreign direct investment and green innovation in Chinese multinational companies

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  • Shi, Xing
  • Zeng, Yujie
  • Wu, Yanrui
  • Wang, Shuai

Abstract

This paper investigates the reverse green innovation spillovers of outward foreign direct investment (OFDI) in Chinese multinational companies and how environmental regulation stringency in host countries moderates the relationship between OFDI and green innovation. The empirical analysis is based on an integrated dataset of publicly listed firms from 2008 to 2018. The findings demonstrate a significantly positive relationship between OFDI and the green innovation performance of multinational companies. It is also shown that environmental regulation stringency in host countries positively moderates the relationship between OFDI and green innovation. Further analysis reveals the variation of the findings across multinational companies in host countries at different development stages, with different ownership and in industries with different pollution intensities. The observations in this paper imply that the institutional environment of investment destinations matters for reverse technology spillovers, particularly reverse green technology spillovers from OFDI.

Suggested Citation

  • Shi, Xing & Zeng, Yujie & Wu, Yanrui & Wang, Shuai, 2023. "Outward foreign direct investment and green innovation in Chinese multinational companies," International Business Review, Elsevier, vol. 32(5).
    • Handle: RePEc:eee:iburev:v:32:y:2023:i:5:s0969593123000604
    DOI: 10.1016/j.ibusrev.2023.102160
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    Keywords

    Outward foreign direct investment; Green innovation; Environmental regulation stringency; Chinese multinational companies;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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