Two-Way FDI Synergy and Water Environmental Management Efficiency—An Empirical Study on the Mediating Effect of Heterogeneous Technological Innovation

Abstract

In the context of China’s synergistic development of import and export strategies and water environmental protection, this paper analyzes the role of two-way FDI synergistic development in water environmental governance efficiency based on panel data of 30 provinces, municipalities and autonomous regions in China from 2004 to 2021. The paper uses a fixed effect model and analyzes the role of heterogeneous technological innovation using the mediation effect model and the panel threshold model. The results of the study show the following: (1) overall, two-way FDI synergistic development helps to improve China’s water environmental governance efficiency; (2) there is regional heterogeneity in the effect of two-way FDI synergistic development on China’s water environmental governance efficiency, with a significant positive effect in areas along the coast and with high FDI synergistic development levels and an inhibitory effect in inland areas; and (3) the two-way FDI synergy enhances the efficiency of China’s water environmental governance by improving the levels of independent innovation and imitation innovation.