Abstract
The paper presents the results of a study that attempts to investigate the impact of foreign direct investment (FDI) on energy intensity by constructing panel regression model and panel smooth transition regression (PSTR) model. Based on panel data from 1990 to 2014, this study contributes to conduct the impact of FDI on energy intensity from the perspective of emerging country, including BRICS and non-BRICS countries, and investigates the channels of influence of FDI on energy intensity. Besides that, we intend to employ the PSTR model to reveal the nonlinear mechanism of FDI on energy intensity. Our findings reveal several key conclusions: first, FDI exerts insignificant impact on energy intensity in the emerging countries. Second, the impact of FDI on energy intensity is heterogeneous between BRICS and non-BRICS countries. Third, innovation capacity plays various moderating effects on the relationship of FDI and energy intensity among different types of emerging countries. Furthermore, the nonlinear mechanism of FDI on energy intensity is realized with industrial structure as the transition variable, which plays a different effect on the impact of FDI on energy intensity between different samples.
Highlights
A large body of studies have examined the impact of foreign direct investment (FDI) on energy intensity
From the test statistic Lagrange multiplier Wald test (LM), LMF, and likelihood ratio test (LRT), we can summarize that the null hypothesis is strongly rejected at the 1% significance level during two samples, indicating that there is a nonlinear relationship between FDI and energy intensity in BRICS and non-BRICS countries
We further investigate the impact of FDI on energy intensity between BRICS and non-BRICS countries, with industrial structure as the transition variable
Summary
A large body of studies have examined the impact of FDI on energy intensity. BRICS countries achieved a more advanced economic development level and better absorptive capacity, which is conducive to absorb the management skills and advanced enterprise system more effectively, improve their production efficiency and energy utilization efficiency simultaneously, and reduce their energy intensity. Columns 2 and 3 present the results of moderating effect of innovation capacity on the relationship between FDI and energy intensity in BRICS and non-BRICS countries, respectively.
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