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How do FDI and technical innovation affect environmental quality? Evidence from China

Environmental Science and Pollution Research volume 27, pages 7835–7850 (2020)Cite this article

Abstract

Foreign direct investment (FDI) is an important driving force for economic growth and technological innovation, but it also brings environmental pollution problems along with economic development. From the perspective of technological innovation, the impact of FDI on China’s environmental pollution deserves further study. With the spatial econometric tools employed to account for the potential spatial dependence of environmental pollution, this study uses the panel data of 30 province-level units in China from 1998 to 2016 to investigate the impact of FDI and technological innovation on environmental pollution. The results show that increased FDI can reduce environmental pollution, confirming the existence of the “pollution halo hypothesis”; technological innovation can reduce the emissions of sulfur dioxide and smoke dust but increase the chemical oxygen demand. Therefore, vigorous introduction of foreign capital is good for sustainable development for government, but it is also necessary to pay attention to screening and identifying environment-friendly enterprises with advanced production technology and management experience and to reject high-pollution and high-energy-consuming enterprises eliminated by developed countries.

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Notes

  1. The 30 province-level units are as follows: Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, Hainan, Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan, Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia, and Xinjiang.

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Funding

This study received financial support from the National Natural Science Foundation of China (71761137001, 71403015, 71521002), the Beijing Natural Science Foundation (9162013), the Key Research Program of the Beijing Social Science Foundation (17JDYJA009), the National Key Research and Development Program of China (2016YFA0602801, 2016YFA0602603), the Joint Development Program of the Beijing Municipal Commission of Education, and the Silk Road Foundation of Xinjiang University (JGSL17021).

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Affiliations

  1. Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing, 100081, China

    Yu Hao, Yerui Wu & Haitao Wu

  2. School of Management and Economics, Beijing Institute of Technology, Beijing, 100081, China

    Yu Hao & Yerui Wu

  3. Beijing Key Lab of Energy Economics and Environmental Management, Beijing, 100081, China

    Yu Hao

  4. Sustainable Development Research Institute for Economy and Society of Beijing, Beijing, 100081, China

    Yu Hao

  5. Collaborative Innovation Center of Electric Vehicles in Beijing, Beijing, 100081, China

    Yu Hao

  6. College of Economics and Management, Xinjiang University, Urumqi, 830047, China

    Haitao Wu & Siyu Ren

Authors
  1. Yu Hao
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  2. Yerui Wu
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  3. Haitao Wu
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  4. Siyu Ren
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Correspondence to Haitao Wu.

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Hao, Y., Wu, Y., Wu, H. et al. How do FDI and technical innovation affect environmental quality? Evidence from China. Environ Sci Pollut Res 27, 7835–7850 (2020). https://doi.org/10.1007/s11356-019-07411-0

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Keywords

  • Foreign direct investment (FDI)
  • Technological innovation
  • Environmental pollution
  • Spatial interdependence
  • Spatial Durbin model