Environmental Regulation, Foreign Direct Investment and Green Technological Progress—Evidence from Chinese Manufacturing Industries

Jiangfeng Hu, Zhao Wang, Yuehan Lian and Qinghua Huang
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Zhao Wang: School of Economics and Management, Southwest University, Chongqing 400715, China
Yuehan Lian: School of Economics and Management, Southwest University, Chongqing 400715, China
Qinghua Huang: School of Economics and Management, Southwest University, Chongqing 400715, China

IJERPH, 2018, vol. 15, issue 2, 1-14

Abstract: This study examines the spillover effects of foreign direct investment (FDI) on green technology progress rate (as measured by the green total factor productivity). The analysis utilizes two measures of FDI, labor-based FDI and capital-based FDI, and separately investigates four sets of industry classifications—high/low discharge regulation and high/low emission standard regulation. The results indicate that in the low discharge regulation and low emission standard regulation industry, labor-based FDI has a significant negative spillover effect, and capital-based FDI has a significant positive spillover effect. However, in the high-intensity environmental regulation industry, the negative influence of labor-based FDI is completely restrained, and capital-based FDI continues to play a significant positive green technological spillover effects. These findings have clear policy implications: the government should be gradually reducing the labor-based FDI inflow or increasing stringency of environmental regulation in order to reduce or eliminate the negative spillover effect of the labor-based FDI.

Keywords: environmental regulation; FDI; green technological progress; spillover effect (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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