The influence of foreign direct investment and trade opening on green total factor productivity in the equipment manufacturing industry

Yan Li, Yanjiang Wu, Yaqing Chen and Qingbo Huang

Applied Economics, 2021, vol. 53, issue 57, 6641-6654

Abstract: Foreign direct investment (FDI) and import and export trade helped strengthen China’s equipment manufacturing industry, which is among the world’s top high performing industries. However, extensive economic growth in the manufacturing sector has caused massive resource consumption and serious environmental pollution. Therefore, this paper analyzes the impact of FDI and trade openness on the green total factor productivity (GTFP) of China’s equipment manufacturing industry by using panel data of the equipment manufacturing industry and 7 sub-industries in China operating from 2003 to 2015. The results indicate that FDI, export trade, human capital, and environmental regulation have asignificant positive impact on the GTFP of China’s equipment manufacturing industry, while import trade and technological innovation have asignificant negative impact. And the levels of human capital, technological innovation and environmental regulation restrict the impact of FDI and export trade on the GTFP of the equipment manufacturing industry through threshold effects.

Date: 2021
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DOI: 10.1080/00036846.2021.1947961

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