Does Chinese companies' OFDI enhance their own green technology innovation?

Zhang, Weiwei; Zhang, Shijin; Fu, Chen; Wang, Yuan; Zhang, Yichi

doi:10.1016/j.frl.2023.104113

Cited by 29 publications

(11 citation statements)

References 11 publications

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“…Control variables and data sources. Following Zhang et al (2023), we control for a series of firm-level characteristic variables, including debt to asset ratio (Lev), rate of return on total assets (ROA), return on equity (ROE), cash flow ratio (Cashflow), increase rate of main business revenue (Growth), year of firm establishment (Age), and Tobin Q (Tobin_q).…”

Section: Variables Selectionmentioning

confidence: 99%

Going out and bringing in: Exploring the impact of OFDI on green innovation performance under firms' digital transformation strategies

Wang,

Wu,

Liu

et al. 2024

Manage Decis Econ

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Under the digital transformation strategy, whether the overseas investment activities of firms can achieve reverse green spillover is significant to their implementation of green and low‐carbon transformation. Accordingly, we examined the impact of outward foreign direct investment (OFDI) on green technology innovation (GTI) in parent firms under the digital transformation strategy at the micro‐level using a zero‐inflated negative binomial regression (ZINB) model with data from Chinese A‐share listed firms for 2000–2021. The study shows that (1) OFDI is beneficial to the growth of the parent firm's GTI. The results of both the instrumental variables approach and robustness tests support the baseline findings. (2) The scale, competitive, and human capital effects are the three micro‐mechanisms through which OFDI drives GTI. (3) Digital transformation has a positive moderating effect on OFDI and GTI, implying that digital transformation reinforces the reverse green spillover effect of OFDI. (4) The results of heterogeneity analysis show that state‐owned firms and firms with overseas executives have a more outstanding contribution of OFDI to GTI, and the moderating effect of digital transformation is more significant. This study provides micro‐level theoretical and empirical experiences on the green innovation effects of firms' digital transformation and overseas investment strategies.

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Section: Variables Selectionmentioning

confidence: 99%

Going out and bringing in: Exploring the impact of OFDI on green innovation performance under firms' digital transformation strategies

Wang,

Wu,

Liu

et al. 2024

Manage Decis Econ

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show abstract

“…Prior research on green innovation mostly concentrates on topics such as corporate governance, environmental conservation, technological advancement, and so forth. For instance, researchers have discovered that executives' knowledge of ESG [36] and companies' foreign direct investment [37] will enhance companies' green innovation. However, the short-sighted actions of managers will impede the progress of green innovation [38].…”

Section: Related Research On the Green Innovation Behavior Of Companiesmentioning

confidence: 99%

The Spillover Effect of ESG Performance on Green Innovation—Evidence from Listed Companies in China A-Shares

Zhu,

Yang

2024

Sustainability

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This research paper examines the spillover effect of ESG performance on green innovation behavior in companies within the same industry. The study specifically focuses on listed companies on the Shanghai Stock Exchange and Shenzhen Stock Exchange between 2011 and 2020. The results indicate that peer firms with superior environmental, social, and governance (ESG) performance have a notable and beneficial impact on the green innovation activities, quantities, and qualities of their counterparts. Significantly, this phenomenon is especially evident for the ecological (E) and societal (S) aspects of ESG performance when considering companies within the same industry. Additionally, according to our analysis, the association between peer firms’ improved ESG performance and subsequent gains in green innovation activities is mediated by higher R&D expenditure and increased green consciousness. The robustness of these findings persists even after resolving issues of endogeneity through thorough testing. In addition, this paper finds that the spillover effects are more significant for non-state-owned firms, small-sized firms, firms with more analyst attention, firms in non-highly polluting industries, and when external environmental regulations are stronger.

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“…Based on Eq (6), multiplying the upstream degree index of the manufacturing Q industries in i country by the proportion of each industry in the total output of the manufacturing industry and then adding them up, we can obtain the upstream degree index of the overall manufacturing industry in i country, as shown in Eq (8). It should be noted that this study assumes that China's general trade and processing trade are two "economic entities".…”

Section: Plos Onementioning

confidence: 99%

“…It should be noted that this study assumes that China's general trade and processing trade are two "economic entities". Therefore, the upstream degree index of China's general trade and processing trade calculated using Eq (8) does not represent the GVC position of China's overall manufacturing industry. Therefore, when calculating the upstream degree index of China's overall manufacturing industry, the general trade and…”

Section: Plos Onementioning

confidence: 99%

“…Additionally, OFDI enables China's manufacturing industry to establish closer ties with foreign R&D [7]. In order to facilitate the acquisition of information pertaining to crucial production technologies and advanced management expertise, as well as to enhance its capacity for scientific and technology innovation and value creation [8]. China's OFDI topped that of the United States for the first time in 2020, ranking first globally.…”

Section: Introductionmentioning

confidence: 99%

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Outward foreign direct investment and GVC position of manufacturing industry: A perspective on China’s general trade and processing trade structure

Ren,

Le,

2023

PLoS ONE

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Depending on the trading modes, the effect of Outward Foreign Direct Investment (OFDI) on the manufacturing industry’s position within the global value chain (GVC) may differ considerably. This paper examines the GVC position of China’s manufacturing industry from 2003 to 2018, specifically focusing on the general trade and processing trade. Drawing upon this premise, this paper analyzes the effect and mechanism by which OFDI influences the GVC position of China’s manufacturing industry. The result demonstrates that: (1) China’s processing trade manufacturing industry has a much lower GVC position than general trade manufacturing industry. The GVC position of China’s general trade manufacturing industry rose from 2.76 to 2.90 from 2003 to 2018, while processing trade manufacturing industry remained around 1.93. (2) OFDI boosts the GVC position of general trade manufacturing industry through facilitating reverse technology spillover, inducing industry structure upgrading, and enabling export scale expansion. (3) OFDI hinders the GVC position growth of processing trade manufacturing industry. The research findings offer theoretical backing for China to develop OFDI strategies that are tailored to different trading modes within the new framework of dual circulation. These strategies aim to facilitate the transformation and advancement of the manufacturing industry, as well as the growth of the GVC position.

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Does Chinese companies' OFDI enhance their own green technology innovation?

Cited by 29 publications

References 11 publications

Going out and bringing in: Exploring the impact of OFDI on green innovation performance under firms' digital transformation strategies

Going out and bringing in: Exploring the impact of OFDI on green innovation performance under firms' digital transformation strategies

The Spillover Effect of ESG Performance on Green Innovation—Evidence from Listed Companies in China A-Shares

Outward foreign direct investment and GVC position of manufacturing industry: A perspective on China’s general trade and processing trade structure

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