The carbon reduction effect of "Going Global" strategy: an empirical perspective on the carbon emission efficiency of OFDI in China

Under the constraints of the "dual-carbon" objectives, how China can sustain economic development while concurrently achieving carbon emission reduction has become a pressing issue. With the rapid expansion of China's outward foreign direct investment (OFDI), elucidating its impact on carbon emission efficiency (CEE) assumes pronounced significance. Employing the systematic generalized method of moments (GMM) approach, based on panel data spanning the years 2006 to 2019 for China, this study primarily delves into the influence of OFDI on China's CEE. Furthermore, it probes into the mechanisms and asymmetries underpinning the relationship between OFDI and CEE. The principal findings are as follows: (1) augmentation of OFDI exerts a constructive effect on domestic carbon emission reduction, concomitantly yielding a discernible enhancement in CEE. A 1% increase in the magnitude of OFDI flow gives rise to a 0.009% improvement in CEE. (2) Mechanism verification reveals that heightened levels of OFDI operate through elevating green total factor productivity (GTFP), fostering optimal industrial structural adjustments, and invigorating green technological innovation, thereby elevating the CEE of the home country. (3) Asymmetry characterizes the impact of OFDI on domestic CEE, signifying a significant enhancement in regions with lower CEE while exhibiting less conspicuous effects in areas with higher CEE. This study furnishes policymakers with insights into leveraging OFDI to enhance CEE, thereby facilitating the attainment of the "dual-carbon" objectives.

A study on the spatio-temporal evolutionary characteristics of OFDI in Chinese private enterprises and its influencing factors

In the context of China's increasing openness to the global market, outward foreign direct investment (OFDI) has become an effective strategy for expanding overseas markets, and private enterprises have played a crucial role in driving China's economic development. This study utilizes data from the NK-GERC database of Nankai University to conduct a spatio-temporal analysis of the dynamic changes in OFDI by Chinese private enterprises from 2005 to 2020. The findings indicate that Chinese domestic private enterprises' OFDI exhibits a strong spatial pattern in the eastern regions and a weak one in the western regions. The main active investment regions include the Bohai Rim, Yangtze River Delta, and Pearl River Delta. Regarding destination countries for OFDI, traditional developed European economies such as Germany and the USA remain popular choices, but countries along the "Belt and Road" have become hotspots for investment. Non-manufacturing industries account for a higher proportion of investments, with private enterprises showing a preference for investing in foreign enterprises in the service sector. From a sustainable development perspective, the study finds that environmental factors play a significant role in the development of Chinese private enterprises. Moreover, the negative impact mechanism of environmental pollution on private enterprises' OFDI varies according to the enterprises' geographical location and time period. The negative effect is more significant in coastal areas and eastern regions compared to central and western regions, with the most significant impact observed from 2011 to 2015, followed by 2005 to 2010, and the weakest impact seen from 2016 to 2019. As China's ecological environment continues to improve, the negative impact of environmental pollution on enterprises gradually decreases, contributing to the improvement of the sustainability of private enterprises.

The role of OFDI in home-country pollution: insights from LMDI and 3SLS approaches

Under the global climate crisis, harnessing investment for sustainable development is a practical and effective measure for international society. Based on the logarithmic mean Divisia index (LMDI) decomposition and three-stage least squares (3SLS) structural approaches, this study explores the home-country pollution reduction effect of Chinese OFDI activities using the city-level panel data from 2007 to 2019. The findings of this study indicate that (1) China has made a remarkable achievement in PM2.5 pollution reduction and governance, especially from the year 2012. (2) The OFDI activities can significantly decrease the home-country PM_2.5 pollution. With every 1% increase in OFDI flows, the overall pollution level will decrease by 0.76%. (3) Compared with the scale mechanism, the technology and composition mechanism effects of OFDI flows are more evident in addressing the home-country PM_2.5 pollution. With several related policy implications, this study may fill the lacuna of how to play the role of OFDI activities in the home country, thus promoting sustainable development in the next stage.

The green halo effect of China's OFDI: evidence from countries along the Belt and Road

The growth of China's OFDI (outward foreign direct investment) is a unique feature of the "Belt and Road" project. Does China's OFDI have a green halo effect on countries along the Belt and Road (B&R)? Is this green halo effect somehow asymmetrical? What is the underlying mechanism? This paper systematically examines how China's OFDI exerts its influence on green technology spillovers, based on 56 B&R countries' 2003-2019 panel data. This study makes three significant findings: Firstly, China's OFDI has positive asymmetric characteristics in promoting green technology spillovers to host countries mentioned, which have lower income levels and openness. Secondly, strict relative environmental regulation can act as a "pressure pool," significantly enhancing the "green halo effect"; Thirdly, China's OFDI can help host countries obtain more green technology spillovers through three channels: expanding host countries' economic scale, upgrading host countries' industrial structure, and suppressing host countries' use of non-renewable energy. These findings point the way for 56 host countries to better accessing green technology spillovers.

Outward foreign direct investment and energy intensity: evidence from the listed companies in China

Since 2005, China's outward foreign direct investment (OFDI) has increased year by year, which corresponds to the continuous decline of energy intensity. But there is limited literature concerning their relationship nowadays. To answer whether or not OFDI can reduce energy intensity, this paper selects data from 29 provinces in China from 2006 to 2015 and establishes a fixed-effects model to analyze the relationship. Further, this paper divides OFDI into technology-intensive ones and non-technology-intensive ones in order to distinguish the impact of outward foreign direct investment from different types of enterprises on the energy intensity. Combined with the micro-data of A-share listed companies in Shanghai and Shenzhen stock exchanges, we find that OFDI plays a significant role in reducing the energy intensity in China, and OFDI of high-technology-intensive enterprises has a greater effect on the decrease of energy intensity than that of low-technology-intensive enterprises. This paper classifies OFDI from the perspective of enterprise technology intensity, which enriches the existing research results in the field of international cooperation and energy intensity. It also overcomes the limitations of previous literature data and provides new evidence for encouraging high-tech enterprises to strengthen international cooperation from a micro level.

Cross-border acquisition or greenfield investment? The role of investor sentiment

When a firm invests in a foreign market, it has to choose between cross-border acquisition and greenfield investment. The impact of investor sentiment on the establishment mode of firm outward foreign direct investment (OFDI) has not been investigated by previous literature. Based on the data of Chinese listed companies between 2007 and 2019, this paper finds that firms prefer cross-border acquisition over greenfield investment when investor sentiment is high, and equity issuance and catering to sentiment are transmission channels. Cross-sectional test results show that the impact of investor sentiment on the establishment mode is concentrated in non-state-owned enterprises, and is stronger in non-eastern province firms and in technology-intensive OFDI. After various robustness tests, the main conclusion remains unchanged. This paper not only finds a new determinant that affects the establishment mode of OFDI but also enriches the research on the economic consequences of investor sentiment, which helps understand the role of investor sentiment in firms' internationalization decisions.

Environmental regulations and outward foreign direct investment-empirical evidence from Chinese enterprises

In the context of the new economic normal, environmental protection and economic growth have become the focus of academic attention. This paper explores the effect and impact mechanism of environmental regulations on the outward foreign direct investment (OFDI) of enterprises by using data from the China Industrial Enterprise Database and the Directory of Overseas Investment Enterprises (Institutions) for the years 2004 to 2010. The findings are summarised as follows. Firstly, environmental regulations have a significant positive effect on the OFDI of Chinese enterprises, and this result remains robust after considering the outcomes of robustness tests and endogeneity issues. Secondly, the promotion effect of environmental regulations on the OFDI of Chinese enterprises obviously differs across investment motivations and industry characteristics. Thirdly, productivity gains are important channels through which environmental regulations promote the OFDI of enterprises. These findings have great significance for the effective formulation of environmental regulatory policies and the stable development of the OFDI of Chinese enterprises.

A fresh view of China's OFDI, its motivations and risks thereto

The aims of this paper are: to examine the key reasons for the locations of and the reasons for China's OFDI as it boomed and became a major OFDI player in the global economy; and, to assess the existence and nature of possible risks to such a boom continuing. The core of the paper, in its second section, is a time-indexed review of findings relating to the first theme noted above. The broad conclusions are that: China's OFDI has been a great success in the period 2005-2019; its motivations have included all the usual possibilities, such as access to resources, market access, access to and reverse engineering of technology (very broadly construed), and access to cheap labour for manufacturing; but, it has also sought to wield political influence via infrastructural investment, and its increasingly hostile attitudes in geopolitical terms in the past decade may pose consequential threats to a continuation of the success to date.

The carbon reduction effect of China's outward foreign direct investment for carbon neutrality target

Based on mainland China's provincial OFDI and carbon emissions data from 2003 to 2018, this paper applied a panel fixed-effects model and spatial econometric model to empirically test whether China's OFDI can be a powerful tool to achieve the "carbon neutrality" target. The empirical results indicate that China's OFDI significantly increases carbon emissions, but this effect has temporal and spatial differences. After incorporating spatial factors into the analysis, the impact of OFDI on carbon emissions differs when modelled by different spatial weight matrices. The green effect of OFDI has the problem of poor channels. It is impossible to achieve energy savings and emission reduction by promoting green technology innovation, improving the rationalization of the industrial structure or reducing energy consumption. The test results of the moderating effect indicate that the development of green finance can weaken the positive effect of OFDI on emissions.

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

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.

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

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 (PM₁₀) and sulphur dioxide (SO₂) was negative, and the direct effect on nitrogen dioxide (NO₂) was positive; however, the total effect was negative. An increase of 1% in OFDI would directly decrease the concentrations of PM₁₀ and SO₂ by 0.024% and 0.096%, respectively, while NO₂ 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 SO₂ and NO₂ but not between economic growth and PM₁₀. The spatial panel model results revealed that the spatial spillover effects of air pollutants (i.e. PM₁₀, SO_2, and NO₂) 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.

On the global COVID-19 pandemic and China's FDI

The global COVID-19 pandemic has generated serious challenges for the world economy, including cross-border foreign direct investment (FDI). China's inward FDI (IFDI) and outward FDI (OFDI) are also facing unprecedented risks and challenges. This paper first clarifies the timelines of the pandemic evolving in China, the US, and the rest of the world. It then reflects on China's past development process of IFDI and OFDI, noting the growth of IFDI and highlighting the risks and challenges for OFDI during and after the pandemic. Empirical evidence for the impact of COVID-19 on FDI is set out. Policy recommendations are then made regarding China's latest development strategy using the so-called dual circulation to sustain its economic growth with respect to cross-border FDI.

Five decades of research on foreign direct investment by MNEs: An overview and research agenda

Despite the significance attached to foreign direct investment (FDI) by Multinational enterprises (MNEs), there are is no comprehensive review of the FDI literature. Moreover, those that have been published, focus on subsets of FDI. This review systematically examines the empirical as well as theoretical research on FDI through an analysis of 500 articles published during the last five decades. Theoretical models, methods, context, and contributions to scholarship were reviewed. We strive to highlight the key theories, paradigms, and articles and provide directions for future research. We conclude that FDI has evolved as the most significant area of international business.

Can environmental innovation benefit from outward foreign direct investment to developed countries? Evidence from Chinese manufacturing enterprises

Environmental innovation is an important way to low-carbon economic growth. Outward foreign direct investment (OFDI) can produce reverse technology transfer to promote innovation. This study aims to examine whether OFDI to developed countries can transfer reverse green technology and promote the environmental innovation of manufacturing enterprises in emerging economies (EEs). Based on the technology gap theory, resource bricolage theory, resource-based view, and Potter hypothesis, this study constructs a conceptual model including the direct effect of OFDI on environmental innovation and the moderating effects of the knowledge level of the host country, multinational strategy, absorptive capacity, and environmental regulation. To verify the model, we also use a panel dataset of 424 Chinese manufacturing enterprises during 2010-2017, and the results indicate that OFDI to developed countries can produce reverse green technology transfer and promote parent companies' environmental innovation. The knowledge level of the host country and multinational strategy can further improve the impacts on environmental product innovation. However, absorptive capacity and environmental regulation in EEs do not play a significant moderating role. Consequently, this study expands the application scope of existing theories and enriches the theoretical basis of the relationship between OFDI and environmental innovation.

The advancing clinical impact of molecular imaging in CVD

Molecular imaging seeks to unravel critical molecular and cellular events in living subjects by providing complementary biological information to current structural clinical imaging modalities. In recent years, molecular imaging efforts have marched forward into the clinical cardiovascular arena, and are now actively illuminating new biology in a broad range of conditions, including atherosclerosis, myocardial infarction, thrombosis, vasculitis, aneurysm, cardiomyopathy, and valvular disease. Development of novel molecular imaging reporters is occurring for many clinical cardiovascular imaging modalities (positron emission tomography, single-photon emission computed tomography, magnetic resonance imaging), as well as in translational platforms such as intravascular fluorescence imaging. The ability to image, track, and quantify molecular biomarkers in organs not routinely amenable to biopsy (e.g., the heart and vasculature) open new clinical opportunities to tailor therapeutics based on a cardiovascular disease molecular profile. In addition, molecular imaging is playing an increasing role in atherosclerosis drug development in phase II clinical trials. Here, we present state-of-the-art clinical cardiovascular molecular imaging strategies, and explore promising translational approaches positioned for clinical testing in the near term.