Environmental Impact of Foreign vs. Domestic Capital Investment in China

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract：We compare environmental impacts associated with incoming foreign direct investment versus domestic capital in China. We use aggregate data on Chinese provinces' economic and pollution indicators to explore the effects of the financial origin of fixed capital. Our simultaneous models consider three prime channels through which these effects work: economic scale, sectoral composition, and pollution intensity. Results show that emissions associated with foreign financed capital are lower than with domestically financed capital for some but not all of the considered types of pollution. Terms of use: Documents in

The impact of FDI on regional air pollution in the Republic of Korea: A way ahead to achieve the green growth strategy?

“…industrial SO2 and industrial smoke. Similar results are found by Yang et al (2013), who compare the environmental effects of domestic and foreign capital for six different pollution intensities in 25 Chinese provinces between 1992 and 2008. Even though no significant differences for wastewater and gas emissions are revealed, foreign capital has a significantly lower effect on emissions than domestic capital for the remaining four industrial pollutants, namely SO2, dust, solid waste, and chemical oxygen demand (COD).…”

“…This research jointly analyzes the three channels through which FDI may affect the environment using a simultaneous equations model. Systems of simultaneous equations have often been applied to the FDI-environment nexus as they facilitate the joint modelling of the three effects along with the interactions between the partly endogenous variables (He 2006, Yang et al 2013. Thereby, both the direct as well as the indirect impacts of FDI on the pollution emissions and a feedback effect of the pollution emissions on FDI are considered by adapting the methodology of Bao et al (2011).…”

“…Using the same reasoning FDI is likely not to influence pollution as an isolated factor but rather through several interlinked channels. Therefore, studies have decomposed the environmental effects of FDI into three major channels, namely economic scale, industrial composition, and a technique effect (Bao et al 2011, Yang et al 2013.…”

“…For instance, He (2008), Bao et al (2011), and Yang et al (2013) also utilize simultaneous equations estimations. In He (2008), the FDI-environment relationship is analyzed for 80 Chinese cities between 1993 and 2001 for two air pollution variables, namely the SO2 concentration and total suspended particles (TSP).…”

Crowds in or crowds out? The effect of foreign direct investment on domestic investment in Chinese cities

“…This string of literature has centered on the growth effect of hosting FDI (Berthélemy and Démurger 2000;Su and Liu 2016;Yalta 2013; Zhao 2012) alongside a subset focus on potential pertinent channels (Fu 2004;2008;Liu et al 2009;Zhang 2017). Recently, attention has been directed to its potential effects on institutional and environmental aspects (Chen 2017;Elliot et al 2013;Long et al 2015;Salim et al 2017a;Yang et al 2013). Overall, these efforts have greatly enriched knowledge of FDI and form the basis for relevant policy to guide and manage it.…”