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FDI, technology spillovers and green innovation in China: analysis based on Data Envelopment Analysis

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  • Malin Song
  • Jun Tao
  • Shuhong Wang

Abstract

Over the years, foreign direct investment (FDI) has not only promoted rapid economic growth in China, but also affected the country’s environmental quality through technology spillover. This paper tests the variables that may affect the ability of green innovation by using the Granger causality test. It extracts the variables passed the test as input variables, selects the number of patents as output variable, and evaluates the efficiency of various provinces in mainland China by examining their yearly technological progress variables. At the same time, technological progress is defined and divided into capital and environmental factors, and then panel data using the variable coefficients model was used to fit influencing factors to obtain impact coefficients of capital and environment. On this basis, this paper makes the determination of membership to replace the general sense of ‘threshold’ value by using fuzzy theory and proposes the concept of the ‘comprehensive threshold’ of economic development and environmental protection. The results show that less than a quarter of China’s provinces have crossed the comprehensive threshold. Finally, based on the conclusions of quantitative analysis, some suggestions are proposed that the Chinese government ought to enact different strategies for the introduction of FDI according to different development situations of different provinces. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Malin Song & Jun Tao & Shuhong Wang, 2015. "FDI, technology spillovers and green innovation in China: analysis based on Data Envelopment Analysis," Annals of Operations Research, Springer, vol. 228(1), pages 47-64, May.
    • Handle: RePEc:spr:annopr:v:228:y:2015:i:1:p:47-64:10.1007/s10479-013-1442-0
    DOI: 10.1007/s10479-013-1442-0
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