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China's outward foreign direct investment, environmental protection, and green technology progress

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  • Cai, Weiyi
  • Qin, Sijia
  • Meng, Xiaoqi

Abstract

We select panel data from 30 provinces and regions in China (except Tibet) from 2011 to 2019 as research samples and empirically test the influence mechanism of OFDI on sulfur dioxide (SO2) emissions in China and the interregional spatial spillover effect by employing the mediation effect model and the spatial spillover model, respectively. We find that OFDI (1) has a significant negative spatial spillover effect on China's SO2 emissions; (2) affects the SO2 emissions by the scale effect, the composition effect and the technique effect; (3) inhibits SO2 emissions in the geographically proximate neighboring regions as well as in regions with a similar level of economic development by enhancing the progress of green technology in the latter regions. Finally, we put forward policy recommendations based on our findings, intending to provide a theoretical basis and practical countermeasures for China to expand its Opening-up Policy further while considering environmental governance.

Suggested Citation

  • Cai, Weiyi & Qin, Sijia & Meng, Xiaoqi, 2025. "China's outward foreign direct investment, environmental protection, and green technology progress," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025005477
    DOI: 10.1016/j.iref.2025.104384
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