The Impact of Coordinated Two-Way FDI Development on Carbon Emissions in Belt and Road Countries: An Empirical Analysis Based on the STIRPAT Model and GMM Estimation

Linyue Li () and Yikai Wang
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Linyue Li: School of International Trade and Economics, Central University of Finance and Economics, Beijing 102206, China
Yikai Wang: School of International Trade and Economics, Central University of Finance and Economics, Beijing 102206, China

Sustainability, 2025, vol. 17, issue 19, 1-25

Abstract: The Belt and Road Initiative (BRI) promotes significant cross-border investment, raising critical questions about its environmental consequences, particularly regarding carbon emissions. This paper uses panel data from 47 countries that participated in the “Belt and Road Initiative” earlier from 2000 to 2020 to conduct theoretical analysis and empirical research on the relationship between the coordinated development of two-way FDI and carbon emission intensity, dividing it into scale effect, technology effect and structure effect. The coordinated development of two-way FDI can have an increasing or decreasing impact on carbon emission intensity through these three effects. The main findings of this paper are as follows: (1) The improvement of the degree of coordinated development of two-way FDI significantly reduces carbon emission intensity. (2) The improvement of the degree of coordinated development of two-way FDI can enhance the level of technological innovation, while the improvement of the level of technological innovation will increase carbon emission intensity, thereby reducing the carbon emission reduction effect of the coordinated development of two-way FDI. (3) The improvement of the degree of coordinated development of two-way FDI can reduce carbon emission intensity by promoting the upgrading of industrial structure. Based on the above conclusions, this paper puts forward the following suggestions for the subsequent development of countries along the “Belt and Road”: (1) Further increase two-way FDI and promote the coordinated development of two-way FDI. (2) Promote the upgrading of industrial structure and the green transformation of technology. (3) Increase economic freedom to provide a good environment for economic development.

Keywords: Belt and Road; two-way FDI; coordinated development; carbon emissions; STIRPAT model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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