Empirical research on the relationship between open economy and carbon emission

How does international technology spillover affect China's carbon emissions? A new perspective through intellectual property protection

The carbon trading market is widely recognized as a crucial tool in the effort to combat climate change and alleviate greenhouse gas emissions. It is essential to evaluate its effectiveness in implementation. To achieve this aim, we utilized the Differences-in-Differences (DID) method to analyze carbon emission data spanning from 2007 to 2020 across various provinces in China. The primary objective is to empirically investigate the impact of China's carbon emissions trading mechanism on regional carbon emissions. Results show that the implementation of the carbon emissions trading mechanism has played a positive role in reducing carbon emissions. The research identifies a significant positive correlation between the level of economic development (GDP) and foreign direct investment (FDI) with carbon emissions. Additionally, there is a positive association between the volume of proposals addressing environmental issues and carbon emissions. In summary, this study provides valuable insights into the effectiveness of China's carbon emissions trading mechanism, offering important lessons for future policy development and the optimization of the carbon market.

Environmental problems caused by climate change have become increasingly prominent, and the important role of technological advancement in reducing environmental pollution is receiving more attention. Under the conditions of an open economy, multi-channel international technology spillover has become an important way to improve a country’s technological innovation capabilities. Based on the establishment of China’s intellectual property protection (IPP) system, this paper integrates trade, foreign direct investment (FDI), and outward foreign direct investment (OFDI) into a unified international technology spillover framework and analyzes how international technology spillovers affect China’s carbon emissions at different IPP levels. The results demonstrate that Trade, FDI, and OFDI increase regional carbon emissions and that trade has the greatest effect on carbon emissions’ growth. The regression results of the dynamic threshold demonstrate that as the regional IPP level exceeds the threshold, trade technology spillovers can reduce carbon emission, and that FDI and OFDI further increase carbon emissions. The impact of IPP and international technology spillovers on carbon emissions has regional heterogeneity in China. For the eastern and central regions, the interaction of international technology spillovers and IPP increases carbon emissions, while it has a significant inhibitory effect on carbon emissions in the western region. Therefore, to fully realize the role of international technology spillovers and IPP in reducing car- bon emissions, China should implement differentiated IPP and international technology spillover policies.

In the current complicated and volatile international situation, maintaining the sustainable development of OFDI is critical to the economic recovery and growth of all countries. This study aims to examine the influence of foreign direct investment (FDI) and migration on the sustainable development of outward foreign direct investment (OFDI), the moderating effects of intellectual property rights (IPR) protection on the relationship between FDI and OFDI, and the relationship between migration and OFDI. Using the panel data of 85 countries from 2006 to 2018, we find that, globally, FDI positively affects OFDI and that the positive effect of FDI on OFDI is strengthened by the improvement of IPR protection. Migration negatively affects OFDI, and the influence of IPR protection on the relationship between migration and OFDI is not statistically significant. The study shows that in high-income countries, FDI positively affects OFDI, and IPR protection positively moderates the relationship between FDI and OFDI. For upper-middle-income countries, FDI positively affects OFDI, and IPR protection negatively moderates the relationship between FDI and OFDI. For lower-middle and low-income countries, the influence of FDI on OFDI is not statistically significant. Moreover, the influence of migration on OFDI is not significant in high- or upper-middle-income countries. For lower-middle and low-income countries, migration negatively affects OFDI, and IPR protection positively moderates the relationship between migration and OFDI.

China has put forward the strategic goal of achieving carbon peak by 2030 and carbon neutrality by 2060， and study of the CO2 emission reduction potential is crucial for China and provincial regions to realize the dual-carbon goal. In this study， 30 provinces （autonomous regions and municipalities directly under the central government） in China are used as the research objects， and a regional carbon emission reduction potential evaluation system is constructed. Based on the BP neural network under the CRITIC coefficient of variation method， the provincial emission reduction index is calculated， combined with the cluster analysis of the differences in regional emission reduction potentials， and the SSA-XGBoost model is set up to investigate the factors influencing regional carbon emissions in China and their degree of influence. The results of the study include the following： ① The regional carbon emission reduction level index has a significant spatial correlation. The average carbon emission reduction value is higher in the southeastern coastal provinces， and the inland provinces with more backward economic development have more low values. ② China's 30 provincial-level regions are divided into four emission reduction potential categories， including Shandong， Guangdong， Hebei， Jiangsu， Zhejiang， Fujian， Henan， Hubei， Hunan， and Sichuan with good and excellent emission reduction potentials， which are the main driving forces for realizing the "double carbon" goal， and 14 provinces with average emission reduction potential. The degree of influence on carbon emissions has the following order： energy structure > digital structure > infrastructure structure > industrial structure > resource structure > population structure > economic structure. Energy structure as an influencing factor has the strongest potential to reduce carbon emissions in the industry category， infrastructure structure has a higher degree of influence in the optimization of the environment category， and population structure is more important than digital structure in the social category. The results show that China's carbon emission reduction level is characterized by uneven development regionally， cleaner energy， and a higher influence of social digitalization. To realize benign and efficient transformation and green development of the provinces and the country， it is suggested that the characteristics of provinces with strong emission reduction capacity should gradually be extended to the average and poorer provinces.

I. Introduction Foreign direct investment (FDI) has long been exercised by multinational enterprises (MNEs) from industrialized countries. However, during the 1980s and 1990s some developing countries, especially the newly industrialized economies (NIEs) in East Asia, rapidly emerged as one of the major sources of world FDI flows (Suh and Seo 1997; UNCTAD 1995; Petri 1995). During this same period, annual flows of Korean outward FDI increased at an unprecedented pace. For example, Korea's total approved outward FDI, in nominal terms, increased by about 24-fold between 1985 and 2003: from US$219 million in 1985 to US$5,437 million in 2003. Manufacturing was the leading sector, representing almost 53 per cent of the total outward Korean FDI during this period. The trading sector was the next largest sector, with 24 per cent of the total amount (Korea Export-Import Bank 2003). In terms of factor intensity, labour-intensive manufacturing industries mostly relocated to developing countries, particularly ASEAN countries and China, while most Korean FDI conducted in industrialized countries was capital-intensive manufacturing (Tcha 1998). Such a rapid increase in outward FDI has raised some concern among policy-makers and researchers, primarily about the impact of outward FDI on the domestic economy, and potential welfare implications. (1) One major impact of outward FDI is the trade effect, particularly on the exports of a home country. As for the relationship between FDI and trade, theoretical arguments have been made that the two complement or substitute each other. Earlier theoretical efforts, like Mundell (1957), highlight the trade-substituting nature of FDI, and more recent efforts tend to favour FDI being trade-complementing (Markusen 1983, 1984; Helpman 1984, 1985; Helpman and Krugman 1985; Kojima, 1978, 1991 among others). As Petri (1995) and Pfaffermayr (1996) argue, however, the relationship is not predictable because the trade impact of FDI can be influenced by a range of factors, such as firm strategies, motivations for FDI, and government policies. Therefore, the relationship between FDI and trade remains a subject requiting empirical investigation. There is a mixture of results from empirical studies of FDI on home country exports. Some, like Mundell (1957) and Svensson (1996), found FDI had a negative effect on home country exports. Others found outward FDI had a positive effect on exports: Lipsey and Weiss (1981), Helpman (1984), Grossman and Helpman (1989), Lin (1995), Pfaffermayr (1996), Lim and Moon (2001), KOTRA (1997), Hejazi and Safarian (2001). More recently, Lewer and Terry (2003) demonstrate in their evaluation of the impact on trade stemming from capital account liberalization, that foreign capital in general--and FDI--have strong trade creating effects. In this paper, we study the trade impact of Korean outward FDI in four major ASEAN countries. Lim and Moon (2001) have shown the trade impact of FDI using Korean firm-level information. However, their study tends to show foreign affiliates' inclination to export back to the home country, as do other firm-level studies, rather than the trade-creating or displacing effects of FDI. This arises because they did not control for other trade-affecting factors, such as income and prices. Furthermore, firm-level studies ignore the possibility that foreign affiliates in a host country may drive out local firms in an export-oriented industry. In this case, a foreign affiliate's exports may not necessarily be complementing a home country's exports. Therefore, other trade-related variables need to be appropriately controlled in this type of analysis. In the next section, we discuss the theoretical background as to how FDI and trade are potentially related. In section III, a simple econometric model is constructed to empirically investigate the relationship between FDI and trade. The model is set to consider the impact of outward FDI on exports and imports separately, while taking into account country-specific fixed effects. …

The paper analyses the internationalization of European economies focusing on ten new member states (NMS-10: Cyprus, the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Slovakia, and Slovenia). The degree of internationalization is measured by macroeconomic aggregates, particularly by foreign direct investment (FDI) and international trade. The focus is on the association between FDI and economic growth.The research literature argues on an existing linkage between internationalization of economies through international trade and FDI flows, and economic growth. The integration and accession of the NMS-10 into European Union (EU) is expected to contribute essentially to the increasing of trade and FDI flows.The paper focuses on NMS-10 and compares the impact of FDI and exports on the economic growth before and after their accession to EU, as well as compares the economic internationalization of the NMS-10 with EU-15 countries. We aim to establish the influence of the economic integration on trade and FDI flows. While several studies focus on the influence of inward FDI on host country’s economy, we aim to assess the impact of both inward and outward FDI on the economic growth. The research uses panel data for the period 2000-2008 in a regression framework analysis.Our main hypothesis is that foreign trade and investment liberalization have provided crucial incentive for the ascension of foreign trade and FDI flows in NMS-10 countries, which in a turn have had a positive impact on their economic growth.The findings and implications are useful for predicting the changes in foreign trade and FDI flows for the future members of EU, induced by their accession into EU, as several studies emphasize the high foreign trade and FDI performance as a success determining factor of the European integration process with important managerial and policy implications.

Impact of dual-carbon attention competition from local government on regional carbon emissions in China.

Foreign direct investment and international movement of commodities are interrelated in the world economy. At the same time, the nature of this relationship and the causality issues are ambiguous and need to be studied from both theoretical and empirical sides. The aim of this paper is to estimate empirically the mutual influence of foreign direct investment and international trade in the modern economy. The econometric model is based on the gravity approach, the estimation is made using the Poisson pseudo maximum likelihood method on the data for 67 host and 109 home FDI countries for the period of 2001–2016. The hypotheses on the positive mutual influence of foreign direct investment and international trade are tested. A positive and significant influence of export and import flows on inward foreign direct investment is observed. The largest impact of export and import on foreign direct investment is observed when a two-year lag is considered. We could not reveal a significant influence of foreign direct investment on export and import flows either within one year, or for the lagged FDI values. The authors argue that pro-trade government policy, aimed at the integration of the country into global value chains is an important factor stimulating the inflow of foreign direct investment to the country. From the practical point of view, understanding the causal linkages between export, import and foreign direct investment helps state authorities better forecast the direct and indirect effects of various trade policy incentives.

China is world renowned for its significant achievements in several fields. China’s economic growth has been prominent, with the country’s GDP ranking second globally. China’s Foreign Direct Investment (FDI) inflows have been significant, with the country now known as the second largest economy in the world. FDI however does have some negative consequences on China’s environment. While attracting FDI promotes economic growth through industrial upgrading, the deleterious impacts of the latter on the environment cannot be ignored. The current study analyses the actual use of FDI and carbon emissions in China from 1997 to 2018. Quantitative analysis was employed to analyze the trends of FDI and carbon emissions in China as a whole and in the respective regions, namely the eastern, central and western regions. Regression analysis was then conducted to analyze the impact of FDI on carbon emissions in China on the national level and regional levels, i.e., in the eastern, central and western regions. The conclusion of this article is that FDI will play a positive role in China’s overall carbon emissions. The study has important implications for policy. We recommend that the corresponding investment policies need to be formulated according to the different levels of economic development among the regions.

Determining differences in regional carbon emissions and the factors that affect these differences is important in the realization of differentiated emissions mitigation policies. This paper adopts the Theil index and the partial least square-variable importance of projection (PLS-VIP) method to analyze the change characteristics, regional differences and causes of carbon emissions, as well as the extent to which various factors influenced carbon emissions in China’s eight economic regions in 2005–2017. The results indicate that (1) during the study period, carbon emissions in the eight economic regions displayed a rigid uptrend with a phased characteristic. The growth rates of carbon emissions were different across the studied regions. (2) The overall difference in regional carbon emissions showed an increasing trend, mainly owing to increasing interregional differences. (3) The extent of the influence and explanatory ability of each factor on regional carbon emissions and discrepancies in carbon emissions were different. Population size, economic development, and energy intensity were found to be the three main factors influencing regional carbon emission changes. Industrial structure and urbanization were also contributors to regional differences in emissions. The influence of energy structure on regional carbon emissions and its explanatory power were weak on the whole, but its elastic coefficients and VIP values changed significantly. Finally, regionally targeted proposals for emissions mitigation are offered.

The aim of this research is to examine the potential influence of FDI inflows and tourism industry on carbon dioxide emissions in China using System GMM models for a sample period of 1980–2019. Using FMOLS and DOLS models, this research examines the long-term relationship between the variables, as well as the long-term association among components. Co-joining the boards of FMOLS and DOLS models shows a general correlation between the investigation elements and CO2 emissions in China. FDI, tourism sector, and environment-friendly electricity use have all been major contributors to rising CO2 emissions in China for a long time. Using System GMM, FMOLS, and DOLS models in China, we examined the influence of the travel sector on carbon dioxide emissions as well as environment-friendly electricity usage and foreign direct investment. The government of China is being pushed to attract more foreign direct investment in order to improve the system and expand the transportation industry. As a reasonable responsibility to an unnatural climate change, methods for developing the movement business and theories relating to the movement business should be adopted.

Does regional corruption exacerbate regional carbon emissions? To answer this, based on the spatial Durbin model, this study empirically examines the impact of regional corruption on carbon emission, using panel data from 30 provinces in China during the period 2002–2017. The results show that: (1) there is an indistinctive N-shaped relationship between regional corruption and carbon emissions at the national level. Regional corruption tends to initially aggravate carbon emissions, then contributes to emission reduction, and then finally boosts carbon emissions. However, this effect is not statistically significant. The results suggest that the role of regional corruption on carbon emissions is twofold. Corruption can exacerbate and can also inhibit regional carbon emissions. (2) Pronounced regional heterogeneity exists with regard to the influence of corruption on carbon emissions. Regional corruption and carbon emissions show a significant N-shaped dynamic relationship in China’s central region, while the relationship is not significant in the eastern and western regions. (3) The impact of regional corruption on carbon emissions varies with time. For 2002–2009, regional corruption did not have a significant effect on carbon emissions. For 2010–2017, the direct effect became significant, and an apparent N-shaped relationship formed between regional corruption and carbon emissions. Based on the empirical results, this paper proposes several policy recommendations regarding corruption and carbon governance.Graphic abstract

It is essential to explore the relationship between China’s urbanization, outward foreign direct investment, and carbon emissions, in order to better understand China’s carbon emissions reduction target. To this end, the nonlinear Granger causality test and Markov-switching model are applied to analyze the structural effects of urbanization and outward foreign direct investment on domestic emissions, on the basis of time series data from 1984–2016. The results show that the promotion effect of outward foreign direct investment on carbon emissions is increased from low-carbon regime to high-emission regime. Specifically, 1% increase in OFDI leads to a rise in carbon emissions by 0.064% and 0.112% under the former and latter regime respectively. Unlike the effect trend of outward foreign direct investment, the effect of urbanization on carbon emissions is decreased from a high-emission regime (5.221% rise in carbon emissions with 1% increase in the level of urbanization) to a low-carbon regime (3.133% rise in carbon emissions with 1% increase in the level of urbanization).

China's provincial carbon emission driving factors analysis and scenario forecasting