The Spatial Spillover Effect of OFDI on Energy Efficiency

Abstract

The article uses the spatial Durbin model to examine the spatial spillover effect and mechanism of outward foreign direct investment (OFDI) on China’s green total factor energy efficiency. The study found that, from an overall perspective, outward direct investment negatively impacts local green total factor energy efficiency and has a negative spatial spillover effect on green total factor energy efficiency in geographically related regions. From a regional perspective, the impact of outward direct investment on regional green total factor energy efficiency shows significant regional heterogeneity. In contrast, outward direct investment in the eastern region only promotes improving local green total factor energy efficiency. Mechanism analysis found that outward direct investment negatively impacts the region’s green total factor energy efficiency by inhibiting green technology innovation and industrial structure upgrading. These research conclusions can provide important references for other countries to optimize their foreign investment policies and achieve sustainable development.