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Environmental Regulation, Two-Way Foreign Direct Investment, and Green Innovation Efficiency in China’s Manufacturing Industry

Author

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  • Zhijun Feng

    (School of Economic and Management, Dongguan University of Technology, Dongguan 523808, China)

  • Bo Zeng

    (School of Economic and Management, Dongguan University of Technology, Dongguan 523808, China)

  • Qian Ming

    (School of Economic and Management, Dongguan University of Technology, Dongguan 523808, China)

Abstract

This paper adopts 2009 to 2015 panel data from 27 manufacturing industries in China. A Super-SBM model is used to measure the green innovation efficiency (GIE) of China’s manufacturing industry. A panel data model is then built to systematically examine the impact of environmental regulation (ER) and two-way foreign direct investment (FDI) on the GIE of China’s manufacturing industry under a unified analysis framework. The results are as follows: (1) the overall level of the green innovation efficiency in China’s manufacturing is low, and there is still great potential for improvement. Considering industry heterogeneity, the green innovation efficiency of patent-intensive manufacturing is significantly higher than that of non-patent-intensive manufacturing; (2) in terms of the whole manufacturing industry, ER and the interaction between ER and outward foreign direct investment (OFDI) have significantly negative effects on GIE, OFDI has significantly positive effects on GIE. (3) when considering industry heterogeneity, for patent-intensive manufacturing, ER and the interaction between ER and inward foreign direct investment (IFDI) have significantly negative effects on GIE, while IFDI has significantly positive effect on GIE. For non-patent-intensive manufacturing, ER and the interaction between ER and OFDI have significantly negative effects on GIE, while IFDI and the interaction between ER and IFDI have significantly positive effects on GIE.

Suggested Citation

  • Zhijun Feng & Bo Zeng & Qian Ming, 2018. "Environmental Regulation, Two-Way Foreign Direct Investment, and Green Innovation Efficiency in China’s Manufacturing Industry," IJERPH, MDPI, vol. 15(10), pages 1-22, October.
    • Handle: RePEc:gam:jijerp:v:15:y:2018:i:10:p:2292-:d:176734
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    18. 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).
    19. Cui, Xin & Wang, Chunfeng & Sensoy, Ahmet & Liao, Jing & Xie, Xiaochen, 2023. "Economic policy uncertainty and green innovation: Evidence from China," Economic Modelling, Elsevier, vol. 118(C).
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    21. Udichibarna Bose, 2023. "Does green transition promote green innovation and technological acquisitions?," Working Papers w202305, Banco de Portugal, Economics and Research Department.
    22. Xin Zhang & Feng Xu, 2023. "Environmental Regulation and Spatial Spillover Effect of Green Technology Innovation: An Empirical Study on the Spatial Durbin Model," Sustainability, MDPI, vol. 15(19), pages 1-19, September.

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