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Carbon dioxide emissions and Chinese OFDI: From the perspective of carbon neutrality targets and environmental management of home country

Yang, Tianle; Dong, Qingyuan; Du, Qunyang; Du, Min; Dong, Rui; Chen, Ming


Tianle Yang

Qingyuan Dong

Qunyang Du

Rui Dong

Ming Chen


Studies investigating the relationship between foreign direct investment (FDI) and the environment have focused predominantly on the effects of FDI on host country environments with less attention paid to the impact on home countries. This study turns its attention to the effects of outward foreign direct investment (OFDI) on a home country's carbon dioxide emissions. We use three paths through which OFDI can affect the carbon dioxide emissions of a home country, including economic scale, technology level, and industry composition effects. Using a simultaneous equation model and panel data of 30 provinces of China for the period of 2003–2017, this study finds that OFDI is positively related to the carbon dioxide emissions of the home country, though the effects of emissions have weakened dynamically due the technology developments brought about by OFDI. More specifically, we find that both ‘pollution haven’ and ‘pollution halo’ effects existing in three different paths. The paths of industry composition and technology level show negative effects on carbon dioxide emissions, whilst the path of economic scale is positive. OFDI is also found to be negatively related to the carbon intensity of the home country.

Journal Article Type Article
Acceptance Date Jun 17, 2021
Online Publication Date Jun 26, 2021
Publication Date 2021-10
Deposit Date Dec 10, 2021
Journal Journal of Environmental Management
Print ISSN 0301-4797
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 295
Article Number 113120
Keywords OFDI, Carbon dioxide emissions, Home country, Economic scale, Technology level, Industry composition
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