How green investment significantly relieves resource curse? A new perspective from fiscal decentralization

Xiaoli Hao, Ke Li, Siyu Ren, Qingyu Sun, Weitao Hu and Yan Xue

Resources Policy, 2024, vol. 94, issue C

Abstract: Harsh weather, climate change, and pandemics have wreaked havoc on global economies. Evidently, green investment has become an imperative tool for realizing sustainable economic development in response to these calamities. This article adopts the regression discontinuity design (RDD) as well as stage heterogeneity influential mechanism analysis to study the nonlinear form and potential mechanisms of green investment in mitigating the ecological resource curse, based on provincial panel data of China from 2006 to 2020. The study findings indicate an inverted U-shaped curve in the linkage between green investment and pollution emission, with a turning point at 4.98. Moreover, the analysis of heterogeneity mechanisms reflects that local fiscal decentralization and resource dependence initially impede the effect of green investment on mitigating the ecological resource curse. Nonetheless, as green investment matures, the curse is primarily alleviated through substantive innovation in eco-friendly practices. By investigating the regional and resource endowment heterogeneity, it is obvious that inland and non-resource-based regions are more inclined to benefit from green investment in alleviating the environmental resource curse. Thus, this paper proposes certain policy recommendations tailored to regional characteristics, such as fostering a greener consumption mindset and minimizing industry reliance in resource-based zones.

Keywords: Green investment; Ecological resource curse; Fiscal decentralization; Green technology innovation; The mechanism of stage heterogeneity (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:94:y:2024:i:c:s0301420724004677

DOI: 10.1016/j.resourpol.2024.105100

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