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The Impact of Foreign Direct Investment on Urban Green Total Factor Productivity and the Mechanism Test

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  • Mingliang Zhao

    (Department of International Economics and Trade, Shandong University of Finance and Economics, Jinan 250002, China)

  • Yue Gao

    (Department of International Economics and Trade, Shandong University of Finance and Economics, Jinan 250002, China)

  • Qing Liu

    (School of Travel Agency Management, Shandong College of Tourism and Hospitality, Jinan 250200, China)

  • Wei Sun

    (Key Laboratory of Regional Sustainable Development Modeling, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing 100101, China
    College of Resources and Environment, University of Chinese Academy of Sciences, Beijing 100049, China)

Abstract

This paper employs the slack-based model directional distance function to measure the green total factor productivity of each city, using the panel data of 284 prefecture-level cities in China from 2004 to 2019 and considering the unexpected output. The results are as follows: ① Foreign direct investment significantly suppresses the improvement of urban green total factor productivity, and the negative impact on the green technology progress index is the main reason to inhibit the increase of the green total factor productivity. The results are still significant through a series of robustness tests such as replacing variables and eliminating outliers; the positive intermediary effect of scientific and technological innovation exists, and the Sobel test and bootstrap random sampling test are passed. The upgrading of industrial structure has a positive regulating effect on the improvement of urban green total factor productivity. ② The impact of foreign direct investment on urban green total factor productivity has regional heterogeneity. The inhibitory effect of foreign direct investment on resource-based cities and non-coastal cities is greater than that on non-resource-based cities and coastal cities, and the negative impact on China-Europe train opening cities is greater than that on non-opening cities. Accordingly, the paper puts forward policy suggestions from the aspects of improving the quality of foreign direct investment and implementing differentiated management.

Suggested Citation

  • Mingliang Zhao & Yue Gao & Qing Liu & Wei Sun, 2022. "The Impact of Foreign Direct Investment on Urban Green Total Factor Productivity and the Mechanism Test," IJERPH, MDPI, vol. 19(19), pages 1-20, September.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:12183-:d:925370
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    2. Bo Yuan & Qiuyue Yin, 2024. "Does green foreign investment contribute to air pollution abatement? Evidence from China," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 912-938, March.
    3. Jie Qin & Kaili Yang & Xuhui Ding, 2023. "Can the Reform of the Transfer Tax System Affect Corporate Green Innovation—Evidence from China’s “BT to VAT” Reform," Sustainability, MDPI, vol. 15(4), pages 1-14, February.

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