IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v15y2022i23p9209-d993934.html
   My bibliography  Save this article

How Do FDI and Technological Innovation Affect Carbon Emission Efficiency in China?

Author

Listed:
  • Qizhen Wang

    (Business School, Nanjing Xiaozhuang University, Nanjing 210017, China)

  • Suxia Liu

    (Business School, Zhengzhou University, Zhengzhou 450001, China)

Abstract

China’s economic development is characterized by openness, and trade and investment are important engines for promoting economic development. China’s economy is now in a transitional period, during which excessive carbon emission reduction would inevitably hinder economic development. In this context, improving carbon emission efficiency is an effective way to achieve sustainable development. This paper deals with the relationships among foreign direct investment, technological innovation and carbon emission efficiency. Our research findings include the following. First, carbon efficiency shows regional differences. East China has the highest mean value of carbon emission efficiency, followed by central China and west China over the sample period. Second, FDI exerts both direct and indirect impacts on carbon emission efficiency through technological innovation, which confirms the intermediate effect of technological innovation. Finally, sub-sample analysis indicates that the impact of FDI and technological innovation on carbon emission efficiency show regional heterogeneity. According to these findings, we offer policy recommendations as follows. The government should stimulate independent innovation, promote technological progress in renewable energy and green energy, and attract environmentally friendly foreign investment to improve carbon emission efficiency and boost green development.

Suggested Citation

  • Qizhen Wang & Suxia Liu, 2022. "How Do FDI and Technological Innovation Affect Carbon Emission Efficiency in China?," Energies, MDPI, vol. 15(23), pages 1-16, December.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:23:p:9209-:d:993934
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/15/23/9209/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/15/23/9209/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fisher-Vanden, Karen & Jefferson, Gary H. & Liu, Hongmei & Tao, Quan, 2004. "What is driving China's decline in energy intensity?," Resource and Energy Economics, Elsevier, vol. 26(1), pages 77-97, March.
    2. Jiangfeng Hu & Zhao Wang & Yuehan Lian & Qinghua Huang, 2018. "Environmental Regulation, Foreign Direct Investment and Green Technological Progress—Evidence from Chinese Manufacturing Industries," IJERPH, MDPI, vol. 15(2), pages 1-14, January.
    3. Per Andersen & Niels Christian Petersen, 1993. "A Procedure for Ranking Efficient Units in Data Envelopment Analysis," Management Science, INFORMS, vol. 39(10), pages 1261-1264, October.
    4. Chi Keung Marco Lau & Fu Steve Yang & Zhe Zhang & Vincent K. K. Leung, 2015. "Determinants Of Innovative Activities: Evidence From Europe And Central Asia Region," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 60(01), pages 1-18.
    5. Fang, Guochang & Gao, Zhengye & Tian, Lixin & Fu, Min, 2022. "What drives urban carbon emission efficiency? – Spatial analysis based on nighttime light data," Applied Energy, Elsevier, vol. 312(C).
    6. Mustafa Kamal & Muhammad Usman & Atif Jahanger & Daniel Balsalobre-Lorente, 2021. "Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data ," Energies, MDPI, vol. 14(21), pages 1-25, October.
    7. Anwar, Sajid & Nguyen, Lan Phi, 2014. "Is foreign direct investment productive? A case study of the regions of Vietnam," Journal of Business Research, Elsevier, vol. 67(7), pages 1376-1387.
    8. G. D. A. MacDougall, 1960. "THE BENEFITS and COSTS OF PRIVATE INVESTMENT FROM ABROAD: A THEORETICAL APPROACH," The Economic Record, The Economic Society of Australia, vol. 36(73), pages 13-35, March.
    9. Wolfgang Keller & Stephen R. Yeaple, 2009. "Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 821-831, November.
    10. He, Jie, 2006. "Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces," Ecological Economics, Elsevier, vol. 60(1), pages 228-245, November.
    11. Zhu, Huiming & Duan, Lijun & Guo, Yawei & Yu, Keming, 2016. "The effects of FDI, economic growth and energy consumption on carbon emissions in ASEAN-5: Evidence from panel quantile regression," Economic Modelling, Elsevier, vol. 58(C), pages 237-248.
    12. Jeong Hwan Bae & Dmitriy D. Li & Meenakshi Rishi, 2017. "Determinants of CO emission for post-Soviet Union independent countries," Climate Policy, Taylor & Francis Journals, vol. 17(5), pages 591-615, July.
    13. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    14. Sgobbi, Alessandra & Simões, Sofia G. & Magagna, Davide & Nijs, Wouter, 2016. "Assessing the impacts of technology improvements on the deployment of marine energy in Europe with an energy system perspective," Renewable Energy, Elsevier, vol. 89(C), pages 515-525.
    15. Qiongzhi Liu & Jun Hao, 2022. "Regional Differences and Influencing Factors of Carbon Emission Efficiency in the Yangtze River Economic Belt," Sustainability, MDPI, vol. 14(8), pages 1-15, April.
    16. 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.
    17. Yuquing Xing & Charles Kolstad, 2002. "Do Lax Environmental Regulations Attract Foreign Investment?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 1-22, January.
    18. Huang, Yongming & Haseeb, Mohammad & Usman, Muhammad & Ozturk, Ilhan, 2022. "Dynamic association between ICT, renewable energy, economic complexity and ecological footprint: Is there any difference between E-7 (developing) and G-7 (developed) countries?," Technology in Society, Elsevier, vol. 68(C).
    19. Youxue Jiang & Zakia Batool & Syed Muhammad Faraz Raza & Mohammad Haseeb & Sajjad Ali & Syed Zain Ul Abidin, 2022. "Analyzing the Asymmetric Effect of Renewable Energy Consumption on Environment in STIRPAT-Kaya-EKC Framework: A NARDL Approach for China," IJERPH, MDPI, vol. 19(12), pages 1-15, June.
    20. Wang, Shaojian & Zeng, Jingyuan & Liu, Xiaoping, 2019. "Examining the multiple impacts of technological progress on CO2 emissions in China: A panel quantile regression approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 140-150.
    21. Mohd Shahidan Shaari & Diana Nabila Chau Abdullah & Nur Salimah Binti Alias & Nor Syamimi Mohamed Adnan, 2016. "Positive and Negative Effects of Research and Development," International Journal of Energy Economics and Policy, Econjournals, vol. 6(4), pages 767-770.
    22. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    23. Keller, Wolfgang & Yeaple, Stephen, 2003. "Multinational Enterprises, International Trade and Productivity Growth: Firm-Level Evidence from the US," CEPR Discussion Papers 3805, C.E.P.R. Discussion Papers.
    24. Fernandes, Ana M. & Paunov, Caroline, 2012. "Foreign direct investment in services and manufacturing productivity: Evidence for Chile," Journal of Development Economics, Elsevier, vol. 97(2), pages 305-321.
    25. Matthew A. Cole & Robert J. R. Elliott, 2005. "FDI and the Capital Intensity of “Dirty” Sectors: A Missing Piece of the Pollution Haven Puzzle," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 530-548, November.
    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. Leng, Tiecheng & Liu, Ying & Xiao, Yi & Hou, Chunxiao, 2023. "Does firm financialization affect optimal real investment decisions? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 79(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. Qizhen Wang & Qian Zhang, 2022. "Foreign Direct Investment and Carbon Emission Efficiency: The Role of Direct and Indirect Channels," Sustainability, MDPI, vol. 14(20), pages 1-23, October.
    2. Song, Wenfei & Han, Xianfeng, 2022. "The bilateral effects of foreign direct investment on green innovation efficiency: Evidence from 30 Chinese provinces," Energy, Elsevier, vol. 261(PB).
    3. Solarin, Sakiru Adebola & Al-Mulali, Usama & Musah, Ibrahim & Ozturk, Ilhan, 2017. "Investigating the pollution haven hypothesis in Ghana: An empirical investigation," Energy, Elsevier, vol. 124(C), pages 706-719.
    4. Humaira Raffat & Danish Ahmed Siddiqui, 2020. "Does Openness, and Productivity Matters for FDI: A Global Interactive Analysis Based on the Complementary Role of Institutions," Issues in Economics and Business, Macrothink Institute, vol. 6(2), pages 1-21, December.
    5. Olufemi Adewale Aluko & Muazu Ibrahim & Xuan Vinh Vo, 2022. "Toward achieving sustainable development: Searching for economic development and globalization thresholds in the foreign direct investment‐environmental degradation nexus," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(4), pages 678-692, August.
    6. Assad Ullah & Xinshun Zhao & Muhammad Abdul Kamal & Jiajia Zheng, 2022. "Environmental regulations and inward FDI in China: Fresh evidence from the asymmetric autoregressive distributed lag approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1340-1356, January.
    7. José M. Cansino & Rocio Román-Collado & Juan C. Molina, 2019. "Quality of Institutions, Technological Progress, and Pollution Havens in Latin America. An Analysis of the Environmental Kuznets Curve Hypothesis," Sustainability, MDPI, vol. 11(13), pages 1-20, July.
    8. Ruiqing Yuan & Xiangyang Xu & Yanli Wang & Jiayi Lu & Ying Long, 2024. "Evaluating Carbon-Emission Efficiency in China’s Construction Industry: An SBM-Model Analysis of Interprovincial Building Heating," Sustainability, MDPI, vol. 16(6), pages 1-16, March.
    9. Azarnoosh Kafi & Behrouz Daneshian & Mohsen Rostamy-Malkhalifeh, 2021. "Forecasting the confidence interval of efficiency in fuzzy DEA," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 31(1), pages 41-59.
    10. Büschken, Joachim, 2009. "When does data envelopment analysis outperform a naïve efficiency measurement model?," European Journal of Operational Research, Elsevier, vol. 192(2), pages 647-657, January.
    11. Adler, Nicole & Friedman, Lea & Sinuany-Stern, Zilla, 2002. "Review of ranking methods in the data envelopment analysis context," European Journal of Operational Research, Elsevier, vol. 140(2), pages 249-265, July.
    12. Matthias Klumpp & Dominic Loske, 2021. "Sustainability and Resilience Revisited: Impact of Information Technology Disruptions on Empirical Retail Logistics Efficiency," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    13. da Silva, Aneirson Francisco & Miranda, Rafael de Carvalho & Marins, Fernando Augusto Silva & Dias, Erica Ximenes, 2024. "A new multiple criteria data envelopment analysis with variable return to scale: Applying bi-dimensional representation and super-efficiency analysis," European Journal of Operational Research, Elsevier, vol. 314(1), pages 308-322.
    14. Lin, L.C. & Hong, C.H., 2006. "Operational performance evaluation of international major airports: An application of data envelopment analysis," Journal of Air Transport Management, Elsevier, vol. 12(6), pages 342-351.
    15. Patricija Bajec & Danijela Tuljak-Suban, 2019. "An Integrated Analytic Hierarchy Process—Slack Based Measure-Data Envelopment Analysis Model for Evaluating the Efficiency of Logistics Service Providers Considering Undesirable Performance Criteria," Sustainability, MDPI, vol. 11(8), pages 1-18, April.
    16. Haugland, Sven A. & Myrtveit, Ingunn & Nygaard, Arne, 2007. "Market orientation and performance in the service industry: A data envelopment analysis," Journal of Business Research, Elsevier, vol. 60(11), pages 1191-1197, November.
    17. Matthew A. Cole & Robert J.R. Elliott & Jing Zhang, 2011. "Growth, Foreign Direct Investment, And The Environment: Evidence From Chinese Cities," Journal of Regional Science, Wiley Blackwell, vol. 51(1), pages 121-138, February.
    18. Martin Eling, 2006. "Performance measurement of hedge funds using data envelopment analysis," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 20(4), pages 442-471, December.
    19. Ruiz, Jose L. & Sirvent, Inmaculada, 2001. "Techniques for the assessment of influence in DEA," European Journal of Operational Research, Elsevier, vol. 132(2), pages 390-399, July.
    20. Pelloneová Natalie, 2023. "Evaluating Hockey Players Using Andersen and Petersen's Super-Efficiency Model: Who is the Best Czech Hockey Player in the NHL?," Polish Journal of Sport and Tourism, Sciendo, vol. 30(3), pages 23-28, September.

    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:jeners:v:15:y:2022:i:23:p:9209-:d:993934. 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.