OFDI, Industrial Structure Upgrading and Green Development—Spatial Effect Based on China’s Evidence

Shan Xu () and Yuan Zhou
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Shan Xu: School of Economics, Hangzhou Dianzi University, Hangzhou 310018, China
Yuan Zhou: School of Economics, Hangzhou Dianzi University, Hangzhou 310018, China

Sustainability, 2023, vol. 15, issue 3, 1-21

Abstract: Green economic development is a worldwide concern. This paper not only contributes to the advancement of studies pertaining to green development but also offers policy recommendations for China to achieve a green and low-carbon economic transformation from the perspective of outward foreign direct investment (OFDI) and industrial structure. A mechanism for the effects of OFDI and industrial structure upgrading on green total factor productivity (GTFP) is proposed in this study. Based on measurement and analysis of the evolution characteristics of GTFP and industrial structure level of 30 provinces (municipalities and autonomous regions) in China from 2004 to 2019, the spatial Durbin model is applied to test their spatial effects. The findings demonstrate that (1) the overall trend of China’s GTFP and industrial structure level is upward, with obvious regional non-equilibrium and spatial dependence; (2) both OFDI and industrial structure upgrading can promote green development independently, with the spatial spillover effect of Industrial structure advancement being more evident; (3) the synergistic effect between OFDI and industrial structure advancement is greater than that between OFDI and industrial structure rationalization, and the spatial spillover effect on regions with comparable economic development is greater than that of surrounding regions; (4) in view of the different levels of openness between regions, the independent and synergistic effects in coastal regions and non-coastal regions are heterogeneous. Therefore, China should optimize OFDI, promote the efficiency of resource allocation, maximize the technology spillover, and strengthen interregional cooperation in order to transform towards a green economy.

Keywords: green total factor productivity (GTFP); industrial structure advancement; industrial structure rationalization; outward foreign direct investment (OFDI); regional heterogeneity; spatial Durbin model (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 (4)

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