Environmental regulation and outward foreign direct investment: Evidence from China

Dong, Yan; Tian, Jinhuan; Wen, Qiang

doi:10.1016/j.chieco.2022.101877

Cited by 10 publications

(5 citation statements)

References 61 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Therefore, AP in the home country may promote OFDI. This finding supports other studies conducted in this area (Dong et al, 2022;Gong et al, 2021;Liu, Zhao et al, 2021), but they mainly focus on the influence of environmental regulations on OFDI, neglecting the direct impact of AP. For example, Gong et al (2021) show that environmental regulations significantly impact OFDI growth.…”

Section: Empirical Results and Discussionsupporting

confidence: 90%

“…Similarly, the hypothesis that OFDI is not a Granger cause of AP cannot be rejected at the significance level of 10%. Therefore, AP and OFDI do not influence each other, which is inconsistent with the literature (Dong et al, 2022; Mohanty & Sethi, 2022).…”

Section: Empirical Results and Discussioncontrasting

confidence: 86%

“…For example, Gong et al (2021) show that environmental regulations significantly impact OFDI growth. Dong et al (2022) find that strict environmental regulations induce firms to relocate factories to other countries through OFDI . Third, different from several other studies that OFDI leads to more AP (Zhao & Zhu, 2022) or OFDI reduces AP (Mohanty & Sethi, 2022; Tanaka et al, 2022; Zhou & Li, 2021), this paper finds that OFDI has both positive and negative influences on AP in different periods.…”

Section: Empirical Results and Discussionmentioning

confidence: 95%

“…The first theory is PHH, which states that firms from dirty industries will relocate to foreign countries with less stringent environmental regulations (Gollop & Roberts, 1983). When severe air pollution exists, the government usually issues environmental regulations requiring firms to use clean technology, pay taxes, and buy pollution discharge permits, which increases firms’ costs (Dong et al, 2022). Thus, AP leads to more OFDI .…”

Section: Ap and Ofdi Interaction Mechanismmentioning

confidence: 99%

“…Furthermore, as the levels of air pollution and OFDI have increased in China in recent years, many researchers have studied AP and OFDI using Chinese data. Dong et al (2022) imply that AP induces firms to relocate to other countries with laxer environmental policies through OFDI . Additionally, Gong et al (2021) find that environmental regulations can promote OFDI.…”

Section: Literature Reviewmentioning

confidence: 99%

See 4 more Smart Citations

The Nexus Between Air Pollution and Outward Foreign Direct Investment

Zhao

2023

SAGE Open

View full text Add to dashboard Cite

This study examines the causal relationship between air pollution ( AP) and outward foreign direct investment ( OFDI) in China by applying the bootstrap rolling-window full- and subsample Granger causality test in a sample from 2013 to 2022. We find that AP negatively influenced OFDI in 2016, while this influence became positive at the end of 2019. The results confirm the coexistence of the pollution haven hypothesis, factor endowment hypothesis, and Porter hypothesis. In turn, OFDI negatively influenced AP in 2019, which proves the “composition effect” and “technique effect,” implying that OFDI brings better air quality by optimizing the economic structure and promoting green technology. However, this influence became positive in 2020, which is consistent with the “scale effect,” indicating that OFDI worsens air quality by expanding production. This research provides insights for the government to coordinate OFDI growth and carbon neutralization to achieve sustainable development. It also has implications for firms to reduce environmental costs through OFDI.

show abstract