Asymmetric influence of China's outward FDI and exports on trade-adjusted resources footprint in belt and road node countries: Moderating role of governance

Abstract

This research explores the asymmetric influence of China's outward FDI, technical efficiency, and trade openness on consumption-based natural resource footprints. It also analyses the moderating role of institutional governance across Belt and Road Initiative (BRI) countries using the Method of Moments Quantile Regression (MMQR) from 2003 to 2020. Panel cointegration, slope heterogeneity, and non-stationarity have been confirmed by the preliminary analysis. Natural resource footprints increase significantly due to Chinese outward FDI and decrease due to technical efficiency, high-quality governance, and inward trade openness. The moderating role of institutional governance shows that resource consumption reduces with improved governance when foreign investment moves into the county. Economic expansion is a major and direct contributor to natural resource footprints across all three quantiles. Manifestly, the influence of the above regressors substantially varies at lower, medium, and higher quantiles. Improving institutional governance is crucial for long-term natural resource management in Belt and Road host countries.