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The Heterogeneous Effects of FDI and Foreign Trade on CO 2 Emissions: Evidence from China

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  • Yuan Huang
  • Xiaochun Chen
  • Huiming Zhu
  • Chuangxia Huang
  • Zhongchu Tian

Abstract

The environmental impacts of foreign direct investment (FDI) and foreign trade have attracted much attention recently. This paper employs panel quantile regression to explore the effects of FDI and foreign trade on Chinese provincial CO 2 emissions for the period of 1997-2014. The results indicate that the effect of FDI on CO 2 emissions is negative and significant except at the and quantiles. Foreign trade has a significant negative effect on CO 2 emissions at upper quantiles, and the degree of the effect increases gradually with the increase of CO 2 emissions. The results also suggest that the inverted U-shaped environmental Kuznets curve (EKC) is valid only in the least and most polluted provinces. Nevertheless, the positive indirect effects of FDI and foreign trade on CO 2 emissions are greater than the negative direct effects; thus the total effects are positive. Finally, several policy implications are proposed for China based on the empirical results obtained.

Suggested Citation

  • Yuan Huang & Xiaochun Chen & Huiming Zhu & Chuangxia Huang & Zhongchu Tian, 2019. "The Heterogeneous Effects of FDI and Foreign Trade on CO 2 Emissions: Evidence from China," Mathematical Problems in Engineering, Hindawi, vol. 2019, pages 1-14, January.
    • Handle: RePEc:hin:jnlmpe:9612492
    DOI: 10.1155/2019/9612492
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    1. Manickam Iswarya & Ramachandran Raja & Grienggrai Rajchakit & Jinde Cao & Jehad Alzabut & Chuangxia Huang, 2019. "Existence, Uniqueness and Exponential Stability of Periodic Solution for Discrete-Time Delayed BAM Neural Networks Based on Coincidence Degree Theory and Graph Theoretic Method," Mathematics, MDPI, vol. 7(11), pages 1-18, November.
    2. Ma, Guangcheng & Qin, Jiahong & Zhang, Yumeng, 2023. "Does the carbon emissions trading system reduce carbon emissions by promoting two-way FDI in developing countries? Evidence from Chinese listed companies and cities," Energy Economics, Elsevier, vol. 120(C).
    3. Hayat Khan & Liu Weili & Itbar Khan, 2022. "Environmental innovation, trade openness and quality institutions: an integrated investigation about environmental sustainability," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 3832-3862, March.
    4. Mohd Shahidan Shaari & Muhamad Huzaifah Asbullah & Noorazeela Zainol Abidin & Zulkefly Abdul Karim & Benjamin Nangle, 2023. "Determinants of Foreign Direct Investment in ASEAN+3 Countries: The Role of Environmental Degradation," IJERPH, MDPI, vol. 20(3), pages 1-14, January.
    5. Valentina Boamah & Decai Tang & Qian Zhang & Jianqun Zhang, 2023. "Do FDI Inflows into African Countries Impact Their CO 2 Emission Levels?," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    6. Fredrick Oteng Agyeman & Ma Zhiqiang & Mingxing Li & Agyemang Kwasi Sampene & Malcom Frimpong Dapaah & Emmanuel Adu Gyamfi Kedjanyi & Paul Buabeng & Yiyao Li & Saifullah Hakro & Mohammad Heydari, 2022. "Probing the Effect of Governance of Tourism Development, Economic Growth, and Foreign Direct Investment on Carbon Dioxide Emissions in Africa: The African Experience," Energies, MDPI, vol. 15(13), pages 1-24, June.
    7. Devesh Singh & Sunil Kumar Dhiman, 2023. "The linkage between carbon emissions, foreign direct investment, economic growth, and gross value added," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 13(1), pages 156-176, March.
    8. Irfan, Muhammad & Rehman, Mubeen Abdur & Razzaq, Asif & Hao, Yu, 2023. "What derives renewable energy transition in G-7 and E-7 countries? The role of financial development and mineral markets," Energy Economics, Elsevier, vol. 121(C).
    9. Ma, Guangcheng & Cao, Jianhua & Famanta, Mahamane, 2023. "Does the coordinated development of two-way FDI increase the green energy efficiency of Chinese cities? Evidence from Chinese listed companies," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 59-77.
    10. Zakari, Abdulrasheed & Li, Guo & Khan, Irfan & Jindal, Abhinav & Tawiah, Vincent & Alvarado, Rafael, 2022. "Are abundant energy resources and Chinese business a solution to environmental prosperity in Africa?," Energy Policy, Elsevier, vol. 163(C).
    11. Abdul Rehman & Mohammad Mahtab Alam & Magdalena Radulescu & Rafael Alvarado & Daniela Mihai & Madalina Brutu, 2022. "A Novel Investigation to Explore the Impact of Renewable Energy, Urbanization, and Trade on Carbon Emission in Bhutan," Energies, MDPI, vol. 15(9), pages 1-17, April.
    12. Mei Zhang & Kazeem Bello Ajide & Lanre Ibrahim Ridwan, 2022. "Heterogeneous dynamic impacts of nonrenewable energy, resource rents, technology, human capital, and population on environmental quality in Sub-Saharan African countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(10), pages 11817-11851, October.

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