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Environmental science and pollution research international
Oct, 2021;28 (37): 50983-51002.

Analysis of the spatial effect of outward foreign direct investment on air pollution: evidence from China.

Anhua Zhou, Jun Li
Author Information
  1. Anhua Zhou: School of Mathematics and Statistics, Hunan University of Technology and Business, Changsha, 410205, China.
  2. Jun Li: Business School, Hunan Normal University, Changsha, 410081, China. lijunedu@126.com. ORCID
PMID: 33974206 DOI: 10.1007/s11356-021-13960-0

Abstract

Outward foreign direct investment (OFDI) plays a pivotal role in the strategy to build a high-level and open economy. This research used spatial panel models and data from 30 provinces in China from 2004 to 2017 to empirically analyse the relationship between OFDI and air pollution. The results revealed that, first, China's air pollution showed two spatial clustering areas: the eastern coastal area (e.g. Zhejiang) and the north-western area (e.g. Xinjiang). Second, with the increase in OFDI, the direct effect on the concentration of respirable suspended particulate matter (PM) and sulphur dioxide (SO) was negative, and the direct effect on nitrogen dioxide (NO) was positive; however, the total effect was negative. An increase of 1% in OFDI would directly decrease the concentrations of PM and SO by 0.024% and 0.096%, respectively, while NO would directly increase by 0.061%, but the total effect of OFDI on the three air pollutants was negative. Third, the environmental Kuznets curve hypothesis existed between economic growth and SO and NO but not between economic growth and PM. The spatial panel model results revealed that the spatial spillover effects of air pollutants (i.e. PM, SO and NO) were 0.494, 0.447 and 0.314, respectively. Moreover, the impact of OFDI on air pollution had significant temporal heterogeneity. To make the results robust, this research conducted a robustness test by replacing the spatial weight matrix and dependent variables. Finally, the conclusion of this article demonstrates the importance of OFDI in improving air pollution, and we could benefit from OFDI. Our research conclusions provide an important reference for policymakers in implementing trade policies and improving air pollution.

Keywords

Air pollution China OFDI Spatial effect

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MeSH Term

Air Pollutants
Air Pollution
China
Nitrogen Dioxide
Particulate Matter

Chemicals

Air Pollutants
Particulate Matter
Nitrogen Dioxide
Journal Article

Word Cloud

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