IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i21p11605-d660936.html
   My bibliography  Save this article

The Impact of Outward Foreign Direct Investment on Carbon Emission toward China’s Sustainable Development

Author

Listed:
  • Feifei Tan

    (Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China
    State Key Laboratory of Pollution Control and Resource Reuse, School of the Environment, Nanjing University, Nanjing 210046, China)

  • Hao Wan

    (Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China)

  • Xiangjun Jiang

    (Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China)

  • Zhiyuan Niu

    (School of Environmental Science, Nanjing Xiaozhuang University, Nanjing 211171, China)

Abstract

It is of practical significance to evaluate whether enhancing outward foreign direct investment (OFDI) can promote carbon mitigation under the new urbanization background toward China’s sustainable development and carbon neutrality. The impact of OFDI on carbon emissions is investigated from the dual perspectives of the urbanization threshold and the mediating path by using panel data from China’s 30 provinces during the period of 2003–2015 and considering both population and land. The results show that there is a significant impact from interprovincial OFDI on CO 2 emissions with the double threshold effect of urbanization, and that OFDI expansion will increase CO 2 emissions with urbanization; however, the different stages of urbanization show inverted U-shaped characteristics that first rise and then fall. The optimization of industrial structures has not passed the mediating effects test during the sample period, while the rationalization of the industrial structure provides a mediating effect in the primary stage of urbanization and a suppressing effect in the high level stage of urbanization. Import dependence only shows a masking effect in the intermediate stage of urbanization, while the technical level shows an intermediary effect in the primary stage of urbanization and a masking effect in the intermediate stage. The intensification of OFDI has brought different effects on economic and social production in various regions of China under urbanization, which has further affected regional carbon emissions. Discussing these effects would help to provide constructive suggestions for the regional coordination of development, new urbanization construction and urban low carbon transformation.

Suggested Citation

  • Feifei Tan & Hao Wan & Xiangjun Jiang & Zhiyuan Niu, 2021. "The Impact of Outward Foreign Direct Investment on Carbon Emission toward China’s Sustainable Development," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11605-:d:660936
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/21/11605/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/21/11605/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    2. Yu, Shiwei & Zheng, Shuhong & Li, Xia, 2018. "The achievement of the carbon emissions peak in China: The role of energy consumption structure optimization," Energy Economics, Elsevier, vol. 74(C), pages 693-707.
    3. Liu, Yiming & Hao, Yu & Gao, Yixuan, 2017. "The environmental consequences of domestic and foreign investment: Evidence from China," Energy Policy, Elsevier, vol. 108(C), pages 271-280.
    4. Sheng, Pengfei & Guo, Xiaohui, 2016. "The Long-run and Short-run Impacts of Urbanization on Carbon Dioxide Emissions," Economic Modelling, Elsevier, vol. 53(C), pages 208-215.
    5. Xu, Bin & Lin, Boqiang, 2015. "How industrialization and urbanization process impacts on CO2 emissions in China: Evidence from nonparametric additive regression models," Energy Economics, Elsevier, vol. 48(C), pages 188-202.
    6. Lin, Sue J. & Lu, I.J. & Lewis, Charles, 2006. "Identifying key factors and strategies for reducing industrial CO2 emissions from a non-Kyoto protocol member's (Taiwan) perspective," Energy Policy, Elsevier, vol. 34(13), pages 1499-1507, September.
    7. Zhang, Chuanguo & Lin, Yan, 2012. "Panel estimation for urbanization, energy consumption and CO2 emissions: A regional analysis in China," Energy Policy, Elsevier, vol. 49(C), pages 488-498.
    8. Huff, Gregg & Angeles, Luis, 2011. "Globalization, industrialization and urbanization in Pre-World War II Southeast Asia," Explorations in Economic History, Elsevier, vol. 48(1), pages 20-36, January.
    9. Danish & Recep Ulucak & Salah Ud‐Din Khan & Muhammad Awais Baloch & Nan Li, 2020. "Mitigation pathways toward sustainable development: Is there any trade‐off between environmental regulation and carbon emissions reduction?," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(4), pages 813-822, July.
    10. Jiang Qingquan & Shoukat Iqbal Khattak & Manzoor Ahmad & Lin Ping, 2020. "A new approach to environmental sustainability: Assessing the impact of monetary policy on CO2 emissions in Asian economies," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1331-1346, September.
    11. Kong, Qunxi & Guo, Rui & Wang, Yang & Sui, Xiuping & Zhou, Shimin, 2020. "Home-country environment and firms’ outward foreign direct investment decision: Evidence from Chinese firms," Economic Modelling, Elsevier, vol. 85(C), pages 390-399.
    12. Li, Hai-ling & Zhu, Xue-hong & Chen, Jin-yu & Jiang, Fei-tao, 2019. "Environmental regulations, environmental governance efficiency and the green transformation of China's iron and steel enterprises," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chuan Tian & Guohui Feng & Huanyu Li, 2023. "Empirical Study on the Impact of Urbanization and Carbon Emissions under the Dual-Carbon Framework Based on Coupling and Coordination," Sustainability, MDPI, vol. 15(6), pages 1-20, March.
    2. Pengfei Cheng & Xingang Huan & Baekryul Choi, 2022. "The Comprehensive Impact of Outward Foreign Direct Investment on China’s Carbon Emissions," Sustainability, MDPI, vol. 14(23), pages 1-16, December.
    3. Scalamonti, Francesco, 2024. "The foreign investments-growth nexus in underdeveloped countries: the state-of-art of research analysing a selected and recent empirical literature (2020-2022)," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    4. Xinwei Zhao & Xinsong Yang & Geng Peng & Shengjie Yue, 2023. "International Trade and Carbon Emissions: Evaluating the Role of Trade Rule Uncertainty," Sustainability, MDPI, vol. 15(15), pages 1-19, July.
    5. Sergei G. Vagin & Elena I. Kostyukova & Natalia E. Spiridonova & Tatiana M. Vorozheykina, 2022. "Financial Risk Management Based on Corporate Social Responsibility in the Interests of Sustainable Development," Risks, MDPI, vol. 10(2), pages 1-13, February.
    6. Tao, Miaomiao & Wang, Jianda & Roubaud, David & Qi, Lingli, 2025. "Global reach, local impact: How China's outward foreign direct investment shapes corporate carbon risk management?," Energy Economics, Elsevier, vol. 144(C).
    7. Osarumwense Osabuohien-Irabor & Igor Mikhailovich Drapkin, 2024. "The spillover effects of outward FDI on environmental sustainability in developing countries: exploring the channels of home country institutions and human capital," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 20597-20627, August.
    8. Shuxin Mao & Hongbing Deng, 2022. "Regional Ecology Supporting Sustainable Development," Sustainability, MDPI, vol. 14(12), pages 1-5, June.

    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. Yanan Wang & Wei Chen & Minjuan Zhao & Bowen Wang, 2019. "Analysis of the influencing factors on CO2 emissions at different urbanization levels: regional difference in China based on panel estimation," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 96(2), pages 627-645, March.
    2. Mohamed Abdouli & Olfa Kamoun & Besma Hamdi, 2018. "The impact of economic growth, population density, and FDI inflows on $$\hbox {CO}_{2}$$ CO 2 emissions in BRICTS countries: Does the Kuznets curve exist?," Empirical Economics, Springer, vol. 54(4), pages 1717-1742, June.
    3. Yixi Xue & Jie Ren & Xiaohang Bi, 2019. "Impact of Influencing Factors on CO 2 Emissions in the Yangtze River Delta during Urbanization," Sustainability, MDPI, vol. 11(15), pages 1-19, August.
    4. Li, Kunming & Fang, Liting & He, Lerong, 2019. "How population and energy price affect China's environmental pollution?," Energy Policy, Elsevier, vol. 129(C), pages 386-396.
    5. Xiao-Ying Dong & Qiying Ran & Yu Hao, 2019. "On the nonlinear relationship between energy consumption and economic development in China: new evidence from panel data threshold estimations," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 1837-1857, July.
    6. Rauf, Abdul & Zhang, Jin & Li, Jinkai & Amin, Waqas, 2018. "Structural changes, energy consumption and carbon emissions in China: Empirical evidence from ARDL bound testing model," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 194-206.
    7. Yannan Zhou & Jixia Huang & Mingxiang Huang & Yicheng Lin, 2019. "The Driving Forces of Carbon Dioxide Equivalent Emissions Have Spatial Spillover Effects in Inner Mongolia," IJERPH, MDPI, vol. 16(10), pages 1-14, May.
    8. Cai, Jinyang & Zheng, Huanyu & Vardanyan, Michael & Shen, Zhiyang, 2023. "Achieving carbon neutrality through green technological progress: evidence from China," Energy Policy, Elsevier, vol. 173(C).
    9. Niu, Honglei & Lekse, William, 2017. "Carbon emission effect of urbanization at regional level: Empirical evidence from China," Economics Discussion Papers 2017-62, Kiel Institute for the World Economy (IfW Kiel).
    10. Li, Ke & Lin, Boqiang, 2015. "Impacts of urbanization and industrialization on energy consumption/CO2 emissions: Does the level of development matter?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1107-1122.
    11. Vélez-Henao, Johan-Andrés & Font Vivanco, David & Hernández-Riveros, Jesús-Antonio, 2019. "Technological change and the rebound effect in the STIRPAT model: A critical view," Energy Policy, Elsevier, vol. 129(C), pages 1372-1381.
    12. Pu, Zhengning & Liu, Jingyu & Yang, Mingyan, 2024. "The effect of digital technology on residential and non-residential carbon emission," International Review of Economics & Finance, Elsevier, vol. 95(C).
    13. Kizito Uyi Ehigiamusoe & Hooi Hooi Lean & Sotheeswari Somasundram, 2024. "Analysis of the environmental impacts of the agricultural, industrial, and financial sectors in Malaysia," Energy & Environment, , vol. 35(5), pages 2329-2356, August.
    14. Chen Zhao & Jiaxuan Zhu & Zhiyao Xu & Yixuan Wang & Bin Liu & Lu Yuan & Xiaowen Wang & Jiali Xiong & Yiming Zhao, 2022. "The Effect of Air Pollution Control Auditing on Reducing Carbon Emissions: Evidence from China," IJERPH, MDPI, vol. 19(24), pages 1-15, December.
    15. You, Geonhwa, 2024. "A comprehensive approach for calibrating anthropogenic effects on atmosphere degradation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    16. Syed Tauseef Hassan & Enjun Xia & Chien-Chiang Lee, 2021. "Mitigation pathways impact of climate change and improving sustainable development: The roles of natural resources, income, and CO2 emission," Energy & Environment, , vol. 32(2), pages 338-363, March.
    17. Shanshan Guo & Yanfang Zhang & Xiangyan Qian & Zhang Ming & Rui Nie, 2019. "Urbanization and CO2 emissions in resource-exhausted cities: evidence from Xuzhou city, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 99(2), pages 807-826, November.
    18. Jing Wang & Guangjie Du & Mohan Liu, 2022. "Spatiotemporal characteristics and influencing factors of carbon emissions from civil buildings: Evidence from urban China," PLOS ONE, Public Library of Science, vol. 17(8), pages 1-23, August.
    19. Buhari Doğan & Oana M. Driha & Daniel Balsalobre Lorente & Umer Shahzad, 2021. "The mitigating effects of economic complexity and renewable energy on carbon emissions in developed countries," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(1), pages 1-12, January.
    20. Lapatinas, Athanasios & Garas, Antonios & Boleti, Eirini & Kyriakou, Alexandra, 2019. "Economic complexity and environmental performance: Evidence from a world sample," MPRA Paper 92833, University Library of Munich, Germany.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:gam:jsusta:v:13:y:2021:i:21:p:11605-:d:660936. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.