Heterogeneous Environmental Regulation, Foreign Direct Investment, and Regional Carbon Dioxide Emissions: Evidence from China

Xiaodi Yang and Di Wang
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Xiaodi Yang: School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, China
Di Wang: School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, China

Sustainability, 2022, vol. 14, issue 11, 1-19

Abstract: As an important means to reduce carbon dioxide (CO 2 ) emissions, environmental regulation (ER) and foreign direct investment (FDI) have become popular research topics in recent years. Most studies have examined the single impact of ER or FDI on CO 2 emissions, while few investigated the regional heterogeneity and the spillover effect of different environmental regulations (ERs) on CO 2 emissions and neglected the impact of the interaction mechanism between ER and FDI on CO 2 emissions. This paper applies the spatial Durbin model (SDM) to explore the impact of different ERs and FDIs on regional CO 2 emissions in China’s 30 provinces from 2003 to 2019. The results indicate that there are significant differences and regional heterogeneity in the effects of different environmental regulations on CO 2 emissions at the national level. FDI has a significant promoting effect on CO 2 emissions in the early years (2003–2009), especially in the eastern and western regions, but its effect is not significant in the late period (2010–2019). At the regional level, the abatement effects of the interaction term between FDIs and ERs are generally significant, indicating that ERs can influence the reduction effect of FDIs. Regulatory environmental regulation (RER) in the eastern region, command environmental regulation (CER), and economic environmental regulation (EER) in the central region can significantly affect the emission reduction effect of local FDI.

Keywords: carbon dioxide emission; environmental regulation; FDI; spatial Durbin model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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