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How does outward foreign direct investment influence manufacturing industry sustainable growth in China?

Author

Listed:
  • Rui Xue

    (Beijing University of Technology)

  • Jiaqi Zhang

    (Beijing University of Technology)

  • Huizheng Liu

    (Beijing University of Technology)

  • Keyu Li

    (Beijing University of Technology)

  • Claude Baron

    (LAAS-ISI - Équipe Ingénierie Système et Intégration - LAAS - Laboratoire d'analyse et d'architecture des systèmes - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INSA Toulouse - Institut National des Sciences Appliquées - Toulouse - INSA - Institut National des Sciences Appliquées - UT - Université de Toulouse - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse - UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse - CNRS - Centre National de la Recherche Scientifique - Toulouse INP - Institut National Polytechnique (Toulouse) - UT - Université de Toulouse)

Abstract

With the economic development of various countries entering a new stage, sustainable development has become a focus of development transformation. It is well known that outward foreign direct investment (OFDI) drives the development of the manufacturing industry. However, the OFDI's influence mechanism on the sustainable development of the manufacturing industry still needs to be clarified, and its specific action path requires further exploration. This study thus constructs a performance evaluation indicator system for the manufacturing industry from sustainable perspective. Based on interprovincial panel data of China's 30 provinces from 2008 to 2017, the entropy method is used to measure and analyse the sustainable development level of the manufacturing industry in each province. Second, the influence of OFDI on the sustainable development level of manufacturing industry is verified using a fixed effects model. Finally, through the establishment of the mediation effect and threshold effect models, we conduct in-depth research on its specific mechanism, testing the mediation effect of technological progress and threshold effect of openness. The results reveal that government departments can enhance the sustainable development of manufacturing industry by promoting technological progress through OFDI. Improving the degree of openness can also promote sustainable development in the manufacturing industry.

Suggested Citation

  • Rui Xue & Jiaqi Zhang & Huizheng Liu & Keyu Li & Claude Baron, 2023. "How does outward foreign direct investment influence manufacturing industry sustainable growth in China?," Post-Print hal-04259490, HAL.
    • Handle: RePEc:hal:journl:hal-04259490
    DOI: 10.1080/00036846.2023.2200233
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    Cited by:

    1. Khurram, Muhammad Usman & Abbassi, Wajih & Chen, Yifan & Chen, Lifeng, 2024. "Outward foreign investment performance, digital transformation, and ESG performance: Evidence from China," Global Finance Journal, Elsevier, vol. 60(C).

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