The effects of outward foreign direct investment and reverse technology spillover on China's carbon productivity

Abstract

Under the background of substantial outward foreign direct investment (OFDI) from China to other countries, it is of great practical significance to examine whether OFDI of China brings green spillovers towards the home country. In view of the lack of in-depth research on the effect of reverse technology spillovers of OFDI on China's carbon productivity, this paper attempts to fill the research gap. Based on a panel dataset involving 30 provinces, this paper calculated the provincial total factor carbon productivity (TFCP) for the period of 2004–2016, and used the Spatial Durbin Model (SDM) to examine the effect of reverse technology spillovers of OFDI on TFCP. The results show that reverse technology spillovers of China's OFDI can significantly promote the growth of TFCP, and the reverse technology spillovers of OFDI has a positive effect on the improvement of TFCP by promoting the technological capabilities of the region. The reverse technology spillovers of OFDI can increase the TFCP of neighboring provinces through the spatial spillover mechanism. Additionally, there exists regional heterogeneity in the effects of the reverse technology spillovers of OFDI on TFCP. The reverse technology spillovers of OFDI has a positive impact on TFCP in the eastern and economically developed regions, and the spillover effect is not significant in the central and western regions and underdeveloped regions.