The Impact of Outward Foreign Direct Investment on Carbon Emission toward China’s Sustainable Development

Feifei Tan, Hao Wan, Xiangjun Jiang and Zhiyuan Niu
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Feifei Tan: Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China
Hao Wan: Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China
Xiangjun Jiang: Institute of Jiangsu Industry Development Research, Nanjing University of Finance & Economics, Nanjing 210023, China
Zhiyuan Niu: School of Environmental Science, Nanjing Xiaozhuang University, Nanjing 211171, China

Sustainability, 2021, vol. 13, issue 21, 1-16

Abstract: It is of practical significance to evaluate whether enhancing outward foreign direct investment (OFDI) can promote carbon mitigation under the new urbanization background toward China’s sustainable development and carbon neutrality. The impact of OFDI on carbon emissions is investigated from the dual perspectives of the urbanization threshold and the mediating path by using panel data from China’s 30 provinces during the period of 2003–2015 and considering both population and land. The results show that there is a significant impact from interprovincial OFDI on CO 2 emissions with the double threshold effect of urbanization, and that OFDI expansion will increase CO 2 emissions with urbanization; however, the different stages of urbanization show inverted U-shaped characteristics that first rise and then fall. The optimization of industrial structures has not passed the mediating effects test during the sample period, while the rationalization of the industrial structure provides a mediating effect in the primary stage of urbanization and a suppressing effect in the high level stage of urbanization. Import dependence only shows a masking effect in the intermediate stage of urbanization, while the technical level shows an intermediary effect in the primary stage of urbanization and a masking effect in the intermediate stage. The intensification of OFDI has brought different effects on economic and social production in various regions of China under urbanization, which has further affected regional carbon emissions. Discussing these effects would help to provide constructive suggestions for the regional coordination of development, new urbanization construction and urban low carbon transformation.

Keywords: outward foreign direct investment; carbon emission; urbanization threshold; sustainable development; carbon neutrality (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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