Abstract
The “Belt and Road” must be built not only as a road to prosperity but also as a green road. However, as China’s outward foreign direct investment (OFDI) in “Belt and Road” participating countries has continued to increase, “China’s pollution transfer” has also been wildly rendered. This article uses data from 21 European countries participating in the “Belt and Road” Initiative from 2009 to 2018. After calculating the institutional distance between each sample country and China using the Kogut–Singh index, this article focuses on using the threshold regression model to study the relationship between China’s OFDI and the host country’s green total factor productivity (GTFP). The empirical results prove that China’s OFDI is green rather than accompanied by pollution transfer, which can promote GTFP in countries participating in the “Belt and Road” Initiative. However, this positive effect will gradually weaken as political institutional distance and economic institutional distance increase. Moreover, the expansion of OFDI can reduce the impact of institutional distance on GTFP in “Belt and Road” participating countries. Therefore, for “Belt and Road” participating countries that differ greatly from China in terms of their institutional environment, cooperation with China should be strengthened to reduce the impact of bilateral institutional differences.
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Data availability
The datasets obtained and analysed in the current study are available from the corresponding author on reasonable request.
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Acknowledgements
The authors are grateful for the financial support provided by Jiangsu Province Decision Consulting Research Base Project, Research on the Green Development Model of the Yangtze River Economic Belt under the Multi-agent Co-governance (19SSL105).
Abbreviations
OFDI outward foreign direct investment
GTFP green total factor productivity
PID political institutional distance
EID economic institutional distance
Gov government intervention
Str industrial structure
FDI the host country attracts foreign direct investment from outside China
SBM slacks-based measure
DDF direction distance function
GDP gross domestic product
CO2 carbon dioxide
VIF variance inflate factor
EKC environmental Kuznets curve
Funding
The research was supported by Jiangsu Province Decision Consulting Research Base Project, Research on the Green Development Model of the Yangtze River Economic Belt under the Multi-agent Co-governance (19SSL105).
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Fangming Xie: Conceptualization, methodology, software, data curation, writing—original draft preparation, formal analysis, and writing—reviewing and editingBing Zhang: Visualization, investigation, supervision, validation, writing—reviewing and editing, and funding acquisition
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Xie, F., Zhang, B. Impact of China’s outward foreign direct investment on green total factor productivity in “Belt and Road” participating countries: a perspective of institutional distance. Environ Sci Pollut Res 28, 4704–4715 (2021). https://doi.org/10.1007/s11356-020-10849-2
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DOI: https://doi.org/10.1007/s11356-020-10849-2