Abstract
Foreign Direct Investment (FDI) not only affects the economic growth but also affects the environmental protection of the host country. With China’s background of pursuing green growth, we need to consider the performance of FDI from the economic and environmental benefit aspects. On this basis, using slacks-based measure directional distance function (SBMDDF) to build up green growth efficiency, economic efficiency and environmental efficiency indexes, empirical research on FDI in 104 Chinese cities from 2004 to 2011 has shown that: (1) Different cities have differences in their green growth efficiency. Shenzhen city is always efficient in green economic growth. (2) Overall, FDI is positive on Chinese cities’ green growth. (3) When the green growth efficiency is broken down into economic efficiency and environmental efficiency, FDI promotes China’s economic green growth through both environmental benefits and economic benefits. (4) The effect of FDI differs in different sectors. FDI in the emission-intensive sector promotes green efficiency mainly through the improvement of economic efficiency. FDI in the non-emission-intensive sector promotes economic efficiency, environmental efficiency and green efficiency.
Highlights
In the past 30 years, China has maintained a sustained and stable economic growth
In the process of China’s rapid economic growth, there are many phenomena of irrational uses of resources and energy, as well as the destruction and deterioration of the natural environment, which results in low efficiency of the environment
After dividing the green growth efficiency into economic efficiency and environmental efficiency, this paper discusses the effects of Foreign Direct Investment (FDI) on the green growth efficiency, economic efficiency and environmental efficiency of China’s urban green growth, respectively
Summary
In the past 30 years, China has maintained a sustained and stable economic growth. The rapid growth of China’s economy has benefitted from the promotion of many factors, and Foreign Direct Investment (FDI) is one of them. The inefficient use of resources, increasing environmental pollution, as well as the large range and frequent appearance of smog and thick haze in recent years have prompted the Chinese government to transfer from the original model of economic growth, which involves high pollution, high energy consumption and high emissions, to a low pollution, low energy consumption and low emissions economic growth model These requirements may have negative impacts on the current economic growth. This paper takes 104 cities in China as research objectives, builds a comprehensive index reflecting the economic and environmental effects of FDI, and explores the economic effects and environmental effects of FDI on the host country, respectively.
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