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Relationship between FDI, fiscal expenditure and green total-factor productivity in China: From the perspective of spatial spillover

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  • Ke-Liang Wang
  • Shuang He
  • Fu-Qin Zhang

Abstract

Deeply investigating the relationship between foreign direct investment (FDI), fiscal expenditure and green total-factor productivity (GTFP) is beneficial to formulating effective policies to promote the high-quality development in China. Based on theoretical mechanism analysis, with panel data of China’s mainland 30 provinces during 2003–2017, this paper utilizes spatial econometric model to empirically explore the effects of FDI, fiscal expenditure and their interaction item on the growth of GTFP in China. The results show that FDI significantly promote the growth of the local and its neighboring GTFP, and both fiscal expenditure and the interaction between FDI and fiscal expenditure exert significantly negative effects on the growth of GTFP in the local and its neighboring regions. A series of robustness checks and the endogeneity test can ensure the reliability of these results. In addition, great heterogeneity can be found across China’s different regions in the relationship between FDI, fiscal expenditure and GTFP. The conclusions suggest that it is necessary to give fully play to the synergy between FDI and fiscal expenditure and formulate regionally targeted policies to improve GTFP and promote high-quality development in China.

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  • Ke-Liang Wang & Shuang He & Fu-Qin Zhang, 2021. "Relationship between FDI, fiscal expenditure and green total-factor productivity in China: From the perspective of spatial spillover," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-28, April.
    • Handle: RePEc:plo:pone00:0250798
    DOI: 10.1371/journal.pone.0250798
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    References listed on IDEAS

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    1. Wang, Qunwei & Su, Bin & Sun, Jiasen & Zhou, Peng & Zhou, Dequn, 2015. "Measurement and decomposition of energy-saving and emissions reduction performance in Chinese cities," Applied Energy, Elsevier, vol. 151(C), pages 85-92.
    2. Miao, Zhuang & Chen, Xiaodong & Baležentis, Tomas & Sun, Chuanwang, 2019. "Atmospheric environmental productivity across the provinces of China: Joint decomposition of range adjusted measure and Luenberger productivity indicator," Energy Policy, Elsevier, vol. 132(C), pages 665-677.
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    Cited by:

    1. Xiaodi Yang & Di Wang, 2022. "Heterogeneous Environmental Regulation, Foreign Direct Investment, and Regional Carbon Dioxide Emissions: Evidence from China," Sustainability, MDPI, vol. 14(11), pages 1-19, May.
    2. Jing, Zhongbo & Liu, Zhidong & Wang, Ting & Zhang, Xuan, 2024. "The impact of environmental regulation on green TFP：A quasi-natural experiment based on China's carbon emissions trading pilot policy," Energy, Elsevier, vol. 306(C).
    3. Shaolong Zeng & Xianfan Shu & Wenxian Ye, 2022. "Total Factor Productivity and High-Quality Economic Development: A Theoretical and Empirical Analysis of the Yangtze River Economic Belt, China," IJERPH, MDPI, vol. 19(5), pages 1-17, February.
    4. Tian, Ying & Pang, Jun, 2023. "What causes dynamic change of green technology progress: Convergence analysis based on industrial restructuring and environmental regulation," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 189-199.
    5. Shuying Wang & Yifei Gao & Hongchang Zhou, 2022. "Research on Green Total Factor Productivity Enhancement Path from the Configurational Perspective—Based on the TOE Theoretical Framework," Sustainability, MDPI, vol. 14(21), pages 1-20, October.
    6. Cristhina Aracelly Rodríguez-Chávez & Luz Mirian Oré-Evanán & Giampierre Gerardo Zapata-Sánchez & Alexander Toribio-Lopez & Germán Rafael Eguiguren-Eguigurem, 2024. "Foreign Direct Investment and Sustainable Development in Asia: Bibliometric Analysis and Systematic Literature Review," Sustainability, MDPI, vol. 16(23), pages 1-22, December.

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