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Do foreign direct investment and environmental regulation improve green technology innovation? An empirical analysis based on panel data from the Chinese manufacturing industry

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Abstract

The environmental regulation and foreign direct investment (FDI) inflow have an important impact on the progress of green technology. This study analyzes the impacts of environmental regulation and FDI on green technology innovation (GTI) based on the panel data of 13 Chinese manufacturing sectors. The results of static panel regression show that the environmental regulation has a positive impact on GTI, while the FDI has a negative impact. The results of the panel threshold model reveal that the effect of environmental regulation on GTI presents a nonlinear shape. The negative effect of FDI on GTI is strengthened when the environmental regulation exceeds its threshold. Increasing FDI inflow can inhibit the effect of environmental regulation. Meanwhile, a strict environmental regulation can enhance the inhibiting effect of FDI on GTI. The FDI inflow into high-tech manufacturing sectors has a less negative impact on GTI than the FDI inflow into low-tech sectors in the case of the enhancement of environmental regulation. This study provides some implications for the formulation of environmental regulation and the FDI inflow into China to improve the GTI.

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The datasets used and analyzed during the current study are available from the corresponding author on reasonable request.

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Funding

This study was financially supported by the Fundamental Research Funds for the Central Universities (grant no. 2020ZDPYMS44).

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Authors and Affiliations

  1. School of Economics and Management, China University of Mining and Technology, Xuzhou, 221116, China

    Shi-Chun Xu, Yun-Fan Li, Jing-Nan Zhang, Yan Wang, Xiao-Xue Ma, Hong-Yu Liu & Hai-Ning Wang

  2. Discipline Construction and Graduate Management Division, Xuzhou University of Technology, Xuzhou, 221018, China

    Yuan Tao

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  1. Shi-Chun Xu
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  2. Yun-Fan Li
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Contributions

Shi-Chun Xu, investigation, supervision, data preprocessing, conceptualization, writing – review and editing; Yun-Fan Li, formal analysis, writing – original draft; Jing-Nan Zhang, methodology writing – review and editing; Yan Wang, writing – review and editing; Xiao-Xue Ma, software; Hong-Yu Liu, data preprocessing; Hai-Ning Wang, writing – review and editing; Yuan Tao, writing – review and editing.

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Correspondence to Shi-Chun Xu or Yuan Tao.

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Xu, SC., Li, YF., Zhang, JN. et al. Do foreign direct investment and environmental regulation improve green technology innovation? An empirical analysis based on panel data from the Chinese manufacturing industry. Environ Sci Pollut Res 28, 55302–55314 (2021). https://doi.org/10.1007/s11356-021-14648-1

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