The effects of environmental regulation on outward foreign direct investment’s reverse green technology spillover: Crowding out or facilitation?

Liu, Liyun; Zhao, Zhenzhi; Zhang, Mingming; Zhou, Chong; Zhou, Dequn

doi:10.1016/j.jclepro.2020.124689

Cited by 54 publications

(26 citation statements)

References 60 publications

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“…The proposed policy recommends scaling up OFDI as a means to reduce domestic environmental pollution. Liu et al [21] argued that the reverse green technology spillovers from OFDI could be amplified through good environmental regulation and the improved knowledge transfer capacity provided by OFDI. The pollution sanctuary hypothesis and the pollution halo hypothesis were discussed in studies focusing on some host country [22,23].…”

Section: Factors Influencing Ofdimentioning

confidence: 99%

Impacts of OFDI on Host Country Energy Consumption and Home Country Energy Efficiency Based on a Belt and Road Perspective

2021

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Under the Belt and Road concepts of mutual benefit and win–win cooperation, China is strengthening its energy cooperation with other countries. We used several econometric models and social network analysis models to study the impacts of China’s outward foreign direct investment (OFDI) on the host and home countries. We first examined China’s OFDI location preference and analysed the effects of OFDI on energy consumption in host countries. Meanwhile, we observed the impact of the reverse spillover effect of OFDI on China’s energy efficiency. The results indicate that (1) the impact of China’s OFDI on energy consumption in host countries has been lower than that on neighbouring countries, and increased significantly after 2014. (2) The space network of energy consumption in Belt and Road countries has a strict hierarchical structure. However, it was disbanded by the Belt and Road policy in 2014. The network centres are situated primarily in Middle Eastern and European countries, and the network’s periphery is mainly in South-East and West Asian countries. (3) The reverse spillover effects of OFDI, FDI, domestic R&D absorptive capacity, human capital, and financial development levels are conducive to improving China’s energy efficiency whereas regional professionalism does the opposite.

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Section: Factors Influencing Ofdimentioning

confidence: 99%

Impacts of OFDI on Host Country Energy Consumption and Home Country Energy Efficiency Based on a Belt and Road Perspective

2021

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“…Thus, governments should be careful about the impact of OFDI on environmental quality. It argues that OFDI shifts productive capital abroad, generates no benefit to the home country, and cannot transfer green technology spillover back to the home economies through the main impact of environmental regulations, and these findings are in line with the works of [20,119].…”

Section: Long-run Results Of Amg (Panel)mentioning

confidence: 63%

The Contribution of Outward Foreign Direct Investment, Human Well-Being, and Technology toward a Sustainable Environment

2021

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This study evaluates the impact of outward foreign direct investment (OFDI), human well-being, and other macro indicators of the public sector on carbon footprint. Empirical analysis has been carried out for newly industrialized economies that span the period 1990–2017. We used augmented mean group and bootstrap panel causality techniques to cogitate the cross-sectional dependence and country-specific heterogeneity. Based on cross-country analysis, study results show that growing OFDI reduces carbon footprint efficiently in Mexico and Turkey, human well-being decreases emissions in the Philippines, and urbanization reduces emissions in China. Further, technology reduces emissions in Malaysia and Turkey, trade openness reduces emissions in China and Malaysia, and natural resource rents reduce emissions in Indonesia and Mexico. In the case of panel analysis, the moderating role of OFDI with human well-being is contributing toward a sustainable environment. Moreover, the moderation of OFDI and urbanization has an insignificant impact on CFP. Findings depict that interaction terms of OFDI with technology and trade openness have a positive association with the environment quality. Finally, OFDI and natural resources have positive moderation on CFP. This study contributes to the existing literature by suggesting policy implications for a sustainable environment.

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“…At the same time, firms’ business decision-making also changes to adapt to changes in environmental regulation policies [ 46 , 47 , 48 ]. At the macro level, the economic effects of environmental regulation are mainly reflected in the effects on economic growth [ 49 ], industrial structure upgrading [ 50 , 51 ], total factor productivity [ 52 , 53 ], foreign trade, and outward investment attraction [ 54 , 55 , 56 ], etc. In terms of research findings, most scholars’ views hold that the macroeconomic effects of environmental regulation are characterized by great uncertainty or nonlinearity, i.e., the direction of the impact of environmental regulation on macroeconomic development may be positive or negative; the trend of the impact may be U-shaped or inverted U-shaped and/or other more complex trends.…”

Section: Literature Reviewmentioning

confidence: 99%

Does Environmental Regulation Help Mitigate Factor Misallocation?—Theoretical Simulations Based on a Dynamic General Equilibrium Model and the Perspective of TFP

Dong

Yang

Zhuang

et al. 2022

IJERPH

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How environmental regulation affects factor allocation is becoming an emerging hot topic in academia. In this paper, we construct a dynamic general equilibrium model accommodating environmental regulatory shock based on the H-K framework to explain the impact of environmental regulation on factor misallocation from the perspective of aggregate total factor productivity loss changes, and numerical simulation results are provided for several representative scenarios. The results show that environmental regulation has a significant effect on factor market misallocation, but this effect is not simply positive or negative, and it mainly depends on the firms’ initial factor allocation status and the intensity of the shock. Reducing the intensity of environmental regulation for firms that face stronger distortion helps mitigate factor misallocation and, on the contrary, the same policy could exacerbate factor market misallocation. Under the environmental regulatory shock condition, firms’ overhead labor input has a moderating effect on the factor allocation mitigation of environmental regulation. Distorted firms’ higher overhead labor share inhibits the correction of factor misallocation by environmental regulation. And reducing firms’ overhead labor share amplifies the correcting effect of environmental regulation on factor misallocation.

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The effects of environmental regulation on outward foreign direct investment’s reverse green technology spillover: Crowding out or facilitation?

Cited by 54 publications

References 60 publications

Impacts of OFDI on Host Country Energy Consumption and Home Country Energy Efficiency Based on a Belt and Road Perspective

Impacts of OFDI on Host Country Energy Consumption and Home Country Energy Efficiency Based on a Belt and Road Perspective

The Contribution of Outward Foreign Direct Investment, Human Well-Being, and Technology toward a Sustainable Environment

Does Environmental Regulation Help Mitigate Factor Misallocation?—Theoretical Simulations Based on a Dynamic General Equilibrium Model and the Perspective of TFP

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