Emission reduction and foreign direct investment nexus in China
Yanrui Wu and
Journal of Asian Economics, 2021, vol. 74, issue C
This paper employs a difference-in-difference-in-difference approach to examine the emission reduction and foreign direct investment nexus in China. It combines a firm-level dataset with emission reduction target statistics at city-level. The findings indicate that stringent environmental regulation is associated with the fall of the output of foreign firms in general and the shrinking of pollution-intensive industries in cities with heavy emission reduction pressure in particular. It is also shown that the location choice of foreign investment changes as emission reduction targets at city-level vary. Finally it is found that environmental regulation helps improve the structure of foreign direct investment and hence contributes to industrial upgrading in the economy.
Keywords: Emission reduction; Foreign direct investment; Environmental regulation; DDD method; China (search for similar items in EconPapers)
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Working Paper: Emission Reduction and Foreign Direct Investment Nexus in China (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:74:y:2021:i:c:s1049007821000348
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