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Heterogeneous effects of endogenous and foreign innovation on CO2 emissions stochastic convergence across China

Yusen Luo, Zhengnan Lu and Xingle Long

Energy Economics, 2020, vol. 91, issue C

Abstract: This paper mainly explores the heterogeneous effects of endogenous and foreign innovation on convergence of CO2 emissions across China's 30 provinces from 2003 to 2017. The main academic contributions of this paper are as follows: convergence analysis of CO2 emissions in China is conducted by integrating the β-convergence and stochastic convergence, which can overcome the invalid inferences of conventional convergence. We also compare different effects of inward foreign direction investment (IFDI) versus outward foreign direction investment (OFDI) on CO2 emissions convergence. Quantile regression is employed in absolute and conditional β-convergence of CO2 emissions, which considers more detailed quantile distribution of different variables than traditional ordinary least squares regression. We also compare different convergence of CO2 emissions across China's East, Middle and West. According to the stochastic convergence, East China has the largest convergence rate, followed by Middle China; endogenous innovation decreased CO2 emissions in China. OFDI had negative effects on CO2 missions in China. It is important for Chinese firms to enhance endogenous green innovation capacity. It is imperative for Chinese government to increase reverse green technology spillover from OFDI.

Keywords: Outward foreign direction investment; Stochastic convergence; Endogenous innovation (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.eneco.2020.104893

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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