Has technological innovation capability addressed environmental pollution from the dual perspective of FDI quantity and quality? Evidence from China

Abstract

With China’s economy gradually entering a new stage of high-quality development, how to effectively improve the level of technological innovation, rational use of foreign investment, and reduce the level of environmental pollution have become important tasks of China’s ecological civilization construction. This study used panel data from 30 provinces in China from 2006 to 2016, using FDI quantity and FDI quality as threshold variables, and using the Hansen nonlinear panel threshold regression model to determine whether there is an EKC curve relationship between technological innovation capabilities and environmental pollution test. The results show that there is a complex nonlinear relationship between technological innovation capability and environmental pollution when taking FDI quantity and quality as dual thresholds. When the level of FDI is low, the capacity for scientific and technological innovation aggravates environmental pollution levels, while when the level of FDI crosses a higher threshold, the capacity for scientific and technological innovation improves environmental quality. However, with a further increase of the level of FDI, the positive effect diminishes to some extent. When FDI quality is low, technological innovation capability aggravates environmental pollution levels, but the impact is not significant. With an improvement in FDI quality, the positive effects of scientific and technological innovation ability on environmental pollution are strengthened. Our results can serve as a reference for effectively promoting scientific and technological innovation and for achieving green sustainable development.