Impact of Foreign Enterprises’ Capital Inflow on Urbanization Factors: Evidence from Northeastern Cities of China

Omar Abu Risha (), Qingshi Wang and Mohammed Ismail Alhussam
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Omar Abu Risha: School of Statistics, Dongbei University of Finance and Economics, Dalian 116025, China
Qingshi Wang: School of Statistics, Dongbei University of Finance and Economics, Dalian 116025, China
Mohammed Ismail Alhussam: School of Economics and Management, Harbin Institute of Technology (Shenzhen), Shenzhen 518055, China

Sustainability, 2023, vol. 15, issue 21, 1-24

Abstract: This study investigates the impact of foreign capital inflow and the number of contracted foreign direct investment projects on urbanization. The study focused on the less-explored provinces of Liaoning, Jilin, and Heilongjiang, covering the period from 2007 to 2021. The definition of urbanization was expanded to include three elements: the urbanized labor force, emission and pollution levels, and the productivity of services in the economy. Most importantly, an urbanization index was generated to estimate the total effect of foreign capital investment on sustainable green urbanization. The analysis employs both random and fixed effects regression models, complemented by robustness checks using the generalized least squares (GLS) method. The findings indicate that while foreign capital investments contribute positively to labor urbanization and service productivity, they have a notably adverse impact on environmental quality in the examined cities. Moreover, our findings confirm an overall inverse relationship between foreign capital investment and the urbanization index: the negative impact is primarily driven by inadequate procedures for emissions control in the northeastern Chinese cities. In conclusion, this research provides insights and strategic recommendations for promoting sustainable green urbanization.

Keywords: foreign capital investment; urbanization; environmental emissions; sulfur dioxide; service productivity; northeastern China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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