The Impact of Urbanization on CO2 Emissions in China: The Key Role of Foreign Direct Investment

Chi-Chuan Lee, Boxu Zhou, Tsung-Yu Yang, Chin-Hsien Yu and Jinsong Zhao

Emerging Markets Finance and Trade, 2023, vol. 59, issue 2, 451-462

Abstract: By adopting the dynamic panel threshold approach, this study assesses how foreign direct investment (FDI) shapes the causality between urbanization and CO2 emissions in China from 1996–2018. The results suggest that a rise in the pace of urbanization increases CO2 emissions, but this harmful effect becomes weaker after achieving a certain level of foreign capital. We also find that the more developed the technology, financial and government sectors, the more it can promote urbanization to reduce CO2 emissions. These results offer policy implications for China’s urban planning and environmental policy.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:59:y:2023:i:2:p:451-462

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DOI: 10.1080/1540496X.2022.2106843

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