IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v181y2023ics0301421523003166.html
   My bibliography  Save this article

The effects of different forms of FDI on the carbon emissions of multinational enterprises: A complex network approach

Author

Listed:
  • Ma, Ning
  • Sun, Wenli
  • Wang, Ze
  • Li, HuaJiao
  • Ma, Xintong
  • Sun, Haocheng

Abstract

The carbon emissions of multinational enterprises (MNEs) through FDI are causing a shift in the emissions burden and threatening mitigation targets. The purpose of this paper is to investigate the effects of the FDI stock, greenfield FDI, and M&As on carbon emissions of MNEs from 2005 to 2016 via quadratic assignment procedure (QAP) network analysis. Through QAP network analysis, we study the FDI-carbon emissions linkage considering the interactions among agents. The results show that the “high-income region to low-income region” mode is gradually becoming the driving force in the global carbon flow, producing lots of carbon emissions with a lower investment. The investments in this mode are dirtier. Second, financial institutions have become the key emitters of global carbon emissions through FDI. This investment model makes global carbon transfer indirect and concealed. Third, the significance of the impacts of the three forms of FDI on the carbon emissions of MNEs is positive, which confirms the pollution haven effect. The greatest contributor is the FDI stock, which comes from historical investments in high-income regions. Greenfield FDI is more influential than M&As in both high- and low-income regions. This paper is a valuable reference for understanding the environmental effects of FDI.

Suggested Citation

  • Ma, Ning & Sun, Wenli & Wang, Ze & Li, HuaJiao & Ma, Xintong & Sun, Haocheng, 2023. "The effects of different forms of FDI on the carbon emissions of multinational enterprises: A complex network approach," Energy Policy, Elsevier, vol. 181(C).
    • Handle: RePEc:eee:enepol:v:181:y:2023:i:c:s0301421523003166
    DOI: 10.1016/j.enpol.2023.113731
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421523003166
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2023.113731?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. Qian Li & Qiuzhi Xue & Yann Truong & Jie Xiong, 2018. "MNCs' industrial linkages and environmental spillovers in emerging economies: The case of China," Post-Print hal-02001799, HAL.
    2. Shahbaz, Muhammad & Nasir, Muhammad Ali & Roubaud, David, 2018. "Environmental degradation in France: The effects of FDI, financial development, and energy innovations," Energy Economics, Elsevier, vol. 74(C), pages 843-857.
    3. Djellouli, Nassima & Abdelli, Latifa & Elheddad, Mohamed & Ahmed, Rizwan & Mahmood, Haider, 2022. "The effects of non-renewable energy, renewable energy, economic growth, and foreign direct investment on the sustainability of African countries," Renewable Energy, Elsevier, vol. 183(C), pages 676-686.
    4. Jun Wen & Waheed Ali & Jamal Hussain & Nadeem Akhtar Khan & Hadi Hussain & Najabat Ali & Rizwan Akhtar, 2022. "Dynamics between green innovation and environmental quality: new insights into South Asian economies," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 543-565, July.
    5. Charles Cadestin & Koen De Backer & Isabelle Desnoyers-James & Sébastien Miroudot & Ming Ye & Davide Rigo, 2018. "Multinational enterprises and global value chains: New Insights on the trade-investment nexus," OECD Science, Technology and Industry Working Papers 2018/05, OECD Publishing.
    6. Arif, Asma & An, Pengli & Qi, Yajie & Li, Huajiao & An, Haizhong & Hussain, Mujahid & Wang, Yanli, 2021. "The influence factors of the national roles in the FDI network: A combined methods of complex networks and Panel Data Analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 563(C).
    7. Charles Cadestin & Koen De Backer & Isabelle Desnoyers-James & Sébastien Miroudot & Davide Rigo & Ming Ye, 2018. "Multinational enterprises and global value chains: the OECD analytical AMNE database," OECD Trade Policy Papers 211, OECD Publishing.
    8. Zengkai Zhang & Dabo Guan & Ran Wang & Jing Meng & Heran Zheng & Kunfu Zhu & Huibin Du, 2020. "Embodied carbon emissions in the supply chains of multinational enterprises," Nature Climate Change, Nature, vol. 10(12), pages 1096-1101, December.
    9. Qingyan Jiang & Cuihong Yang & Jie Wu & Yan Xia, 2022. "Examining the role of China's outward direct investment in realizing carbon neutrality: empirical evidence from Belt and Road countries," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 18(11), pages 5477-5497, March.
    10. Demena, Binyam Afewerk & Afesorgbor, Sylvanus Kwaku, 2020. "The effect of FDI on environmental emissions: Evidence from a meta-analysis," Energy Policy, Elsevier, vol. 138(C).
    11. Xu, Helian & Cheng, Long, 2016. "The QAP weighted network analysis method and its application in international services trade," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 448(C), pages 91-101.
    12. Sapkota, Pratikshya & Bastola, Umesh, 2017. "Foreign direct investment, income, and environmental pollution in developing countries: Panel data analysis of Latin America," Energy Economics, Elsevier, vol. 64(C), pages 206-212.
    13. María-Ángeles Cadarso & Fabio Monsalve & Guadalupe Arce, 2018. "Emissions burden shifting in global value chains – winners and losers under multi-regional versus bilateral accounting," Economic Systems Research, Taylor & Francis Journals, vol. 30(4), pages 439-461, October.
    14. Duan, Yuwan & Jiang, Xuemei, 2021. "Pollution haven or pollution halo? A Re-evaluation on the role of multinational enterprises in global CO2 emissions," Energy Economics, Elsevier, vol. 97(C).
    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. Soto, Gonzalo Hernández, 2024. "The role of outward foreign direct investment as a filter for high energy intensity economies in the European Union," Applied Energy, Elsevier, vol. 361(C).
    2. Li, Xiuqing & Xiao, Liming, 2024. "The impact of urban green business environment on FDI quality and its driving mechanism: Evidence from China," World Development, Elsevier, vol. 175(C).

    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. Ma, Ning & Sun, WenLi & Li, Huajiao & Zhou, Xing & Sun, Yihua & Ren, Bo, 2023. "Industrial linkage of global carbon emissions: A heterogeneous ownership perspective," Energy Policy, Elsevier, vol. 172(C).
    2. Meng, Bo & Gao, Yuning & Ye, Jiabai & Zhang, Meichen & Xing, Yuqing, 2022. "Trade in factor income and the US-China trade balance," China Economic Review, Elsevier, vol. 73(C).
    3. Yan, Yunfeng & Wang, Ran & Chen, Sida & Wang, Feifan & Zhao, Zhongxiu, 2022. "Mapping carbon footprint along global value chains: A study based on firm heterogeneity in China," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 398-408.
    4. Ortiz, Mateo & Cadarso, María-Ángeles & López, Luis-Antonio & Jiang, Xuemei, 2022. "The trade-off between the economic and environmental footprints of multinationals’ foreign affiliates," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 85-97.
    5. Zhu, Kunfu & Guo, Xuefan & Zhang, Zengkai, 2022. "Reevaluation of the carbon emissions embodied in global value chains based on an inter-country input-output model with multinational enterprises," Applied Energy, Elsevier, vol. 307(C).
    6. López, Luis-Antonio & Arce, Guadalupe & Cadarso, María-Ángeles & Ortiz, Mateo & Zafrilla, Jorge, 2023. "The global dissemination to multinationals of the carbon emissions ruling on Shell," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 406-416.
    7. Wilman-Santiago Ochoa-Moreno & Byron Alejandro Quito & Carlos Andrés Moreno-Hurtado, 2021. "Foreign Direct Investment and Environmental Quality: Revisiting the EKC in Latin American Countries," Sustainability, MDPI, vol. 13(22), pages 1-18, November.
    8. Ofori, Isaac K & Gbolonyo, Emmanuel Y. & Ojong, Nathanael, 2022. "Foreign Direct Investment and Inclusive Green Growth in Africa: Energy Efficiency Contingencies and Thresholds," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-58.
    9. Ofori, Isaac K. & Gbolonyo, Emmanuel Y. & Ojong, Nathanael, 2022. "Foreign Direct Investment and Inclusive Green Growth in Africa: Energy Efficiency Contingencies and Thresholds," MPRA Paper 115379, University Library of Munich, Germany, revised 09 Nov 2022.
    10. Li, Meng & Meng, Bo & Gao, Yuning & Wang, Zhi & Zhang, Yaxiong & Sun, Yongping, 2022. "Tracing CO2 emissions in global value chains: Multinationals vs. domestically-owned firms," Sustainable Global Supply Chains Discussion Papers 2, Research Network Sustainable Global Supply Chains.
    11. Sun, Ya-Fang & Su, Bin & Zhong, Sheng & He, Junyi & Yu, Shiwei, 2024. "Determinants of Aggregated Embodied Carbon Intensity in Global Bilateral Exports by Firm Heterogeneity," Ecological Economics, Elsevier, vol. 218(C).
    12. Ofori, Isaac K. & Gbolonyo, Emmanuel Y. & Ojong, Nathanael, 2023. "Foreign direct investment and inclusive green growth in Africa: Energy efficiency contingencies and thresholds," Energy Economics, Elsevier, vol. 117(C).
    13. Wencong, Lu & Kasimov, Ikboljon & Saydaliev, Hayot Berk, 2023. "Foreign direct investment and renewable energy: Examining the environmental Kuznets curve in resource-rich transition economies," Renewable Energy, Elsevier, vol. 208(C), pages 301-310.
    14. Marques, António Cardoso & Caetano, Rafaela, 2020. "The impact of foreign direct investment on emission reduction targets: Evidence from high- and middle-income countries," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 107-118.
    15. Duan, Yuwan & Jiang, Xuemei, 2021. "Pollution haven or pollution halo? A Re-evaluation on the role of multinational enterprises in global CO2 emissions," Energy Economics, Elsevier, vol. 97(C).
    16. Isaac K. Ofori & Emmanuel Y. Gbolonyo & Nathanael Ojong, 2022. "Foreign Direct Investment and Inclusive Green Growth in Africa: Energy Efficiency Contingencies and Thresholds," Working Papers 22/089, European Xtramile Centre of African Studies (EXCAS).
    17. Qiang Wang & Ting Yang & Rongrong Li & Xiaowei Wang, 2023. "Reexamining the impact of foreign direct investment on carbon emissions: does per capita GDP matter?," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-18, December.
    18. Isaac K. Ofori & Emmanuel Y. Gbolonyo & Nathanael Ojong, 2022. "Foreign Direct Investment and Inclusive Green Growth in Africa: Energy Efficiency Contingencies and Thresholds," Working Papers of the African Governance and Development Institute. 22/089, African Governance and Development Institute..
    19. Yan, Yunfeng & Li, Xiyuan & Wang, Ran & Pan, An, 2023. "Global value chain and export-embodied carbon emissions: New evidence from foreign-invested enterprises," Economic Modelling, Elsevier, vol. 127(C).
    20. Yan, Yunfeng & Li, Xiyuan & Wang, Ran & Zhao, Zhongxiu & Jiao, Aodong, 2023. "Decomposing the carbon footprints of multinational enterprises along global value chains," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 13-28.

    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:181:y:2023:i:c:s0301421523003166. 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.