How does environmental regulation moderate the relationship between foreign direct investment and marine green economy efficiency: An empirical evidence from China's coastal areas

Abstract

As a hotspot of foreign direct investment (FDI), China's coastal areas have seen rapid development in its marine economy. However, the frequent occurrence of pollution incidents in multinational companies, along with the continuous deterioration of the marine eco-environment has motivated the government to enact numerous environmental policies to avoid the potential adverse effects of FDI on marine sustainable development. To clarify the effects of these policies, this paper investigates environmental regulations' moderating effects on the relationship between the FDI and marine green economy efficiency, and the spatial performances of these moderating effects by the spatial Dubin model (SDM), using data from 11 provinces and cities in China's coastal areas. The results show that environmental regulation overall has a positive moderating effect on the relationship between the FDI and marine green economy efficiency, i.e., it enhances FDI's contribution to marine green economy efficiency. Specifically, different-type environmental regulations' moderating effects are heterogeneous, where command-and-control and public-participation environmental regulations have positive moderating effects, while economic-incentive environmental regulation has a negative moderating effect. From the further spatial performances, these environmental regulations' moderating roles, excluding the economic-incentive environmental regulation, have significant positive spatial spillover effects on the marine green economy efficiency, promoting the marine green economy efficiency in the surrounding areas. Based on the above findings, this paper proposes some recommendations to policymakers.