The Green Total Factor Productivity Effect Of The China's Outward Foreign Direct Investment

Nowadays,China's economy is shifting to the stage of the high-quality development,and required economic development to shift from being driven by a single factor in the past to being driven by innovation nowadays.Especially,as the source of sustained economic growth and the endogenous evolutionary power,the total factor productivity is a measure of the important indicator of the quality of the national economic development.However,the existing literatures mainly focus on the measurement of the factor inputs,such as capital,labor,and intermediate products,and ignore the constraints of factors such as energy,environment and land.While the green total factor productivity compares energy,environment,land and other factors,the analysis framework of high-quality economic development should include these factors.Because these could better reflect the green and innovative development of the economy under the constraints of resources and environment.At the same time,the “going global” strategy has become one of the important driving forces for China's economic growth.Therein,China's outward foreign direct investment(OFDI)flows totaled US$136.91 billion in 2019 year,ranking the second in the world,and the non-financial outward foreign direct investment flows along the Belt and Road country was US$18.69 billion,an increase of 4.4% year-on-year,accounting for 13% of the total outward foreign direct investment in the same period.Therefore,this paper studies the relationship between OFDI and the high-quality economic development,especially the green total factor productivity effect of the China's OFDI based on the perspective of the home country,and explores the relationship between the those.What is the transmission mechanism? Above all,it is essential for promoting the green transformation and upgrading of the domestic industrial structure and achieving high-quality and green economic development.In order to answer the above questions,from the perspective of the home country,this paper centered on the research framework of the China's Outward Foreign Direct Investment-Green Total Factor Productivity effect,and this paper is more comprehensive in accordance with the idea of the literature review,status analysis,model construction,empirical analysis and suggestions.This paper systematically studies the green total factor productivity effect of the China's Outward foreign direct investment.Firstly,this paper studies the domestic and foreign status quo of OFDI and green total factor productivity,the definition of related concepts and the literatures,and reviews the above-mentioned research.Meanwhile,further reviews the development status of China's OFDI and green total factor productivity.On the one hand,in terms of Outward foreign direct investment,the analysis mainly carries out from four aspects,including the investment scale,location distribution,industry type and province status;On the other hand,in terms of the green total factor productivity,it is mainly concentrated on the three levels of the macro provinces,industries and micro enterprises.The non-radial and non-oriented global reference Malmquist-Luenberger(ML)index is used to construct and measure the green total factor productivity.And initially established a correlation diagram between the China's outward foreign direct investment and green total factor productivity,so that this paper could illustrate the relationship between the China's outward foreign direct investment and green total factor productivity.In addition,from the perspective of the home country,this paper constructs the theoretical model and intermediary mechanism of China's outward foreign direct investment and green total factor productivity between the province and company,and there being a reverse technology spillover transfer mechanism between China's outward foreign direct investment and green total factor productivity,which provides theoretical support for the empirical analysis.Secondly,this paper bases on a macro perspective,using data from 30 provinces in China from 2003 to 2017 year,a provincial panel,quantile regression,and heterogeneous environmental threshold model were established to empirically test the green total factor productivity effect of China's foreign direct investment in the home country.Firstly,on the provincial panel model,this paper use the random effects(RE),fixed effects(FE),maximum likelihood estimation(MLE),and generalized least squares(GLS)measurement methods,and finds the China's Outward Direct investment has promoted the growth of the province's green total factor productivity;Secondly,in the quantile regression model,only at the 75% quantile,China's outward foreign direct investment has a positive effect on green total factor productivity,meanwhile the quantile regression graph presents the characteristics of the peak and tail;Thirdly,on the threshold of the heterogeneous environmental regulations,the heterogeneity analysis carries out the administrative order type,including the market type,the public participation type environmental regulations.The result finds the administrative order type and market-based environmental regulations have a single threshold for the green total factor productivity.When the threshold is exceeded,China's outward foreign direct investment have a stronger positive role in promoting green total factor productivity in the home country,and it is mainly achieved by improving the technological progress of the home country.Thirdly,this paper bases on the spatial perspective,establishes the STIRPAT model,adopts the dynamic Spatial Dubin Model(SDM)empirical method,and constructs spatial autocorrelation test,Moran index measurement test,and establishes common boundary space,inverse geographic distance,and economic geographic nesting the spatial weight matrix with human capital.At the same time,this paper uses the time,space,and time-space interaction matrix,explores the spatial spillover effects of the China's outward foreign direct investment on the green total factor productivity of the home country.Firstly,in the benchmark regression,the study finds that there being a positive spatial spillover effect impact between China's outward foreign direct investment and the green total factor productivity in home country.Under the premise of promoting the province's green total factor productivity,it has increased the ratio of the neighboring provinces under different spatial weights.Secondly,the analysis of the heterogeneity at the regional level finds that compared with the western region,outward foreign direct investment mainly promoted the growth of the green total factor productivity in the eastern region,and inhibited the increase of the green total factor productivity in the central region;Thirdly,according to the test of the intermediary mechanism,outward foreign direct investment mainly promotes the green total factor productivity by promoting regional technological innovation and industrial upgrading.In addition,this paper bases on a micro perspective,it is the first time to systematically and comprehensively analyze the green total factor productivity effects of the Chinese enterprises' outward foreign direct investment from a micro perspective,and this paper uses the Chinese industrial enterprise data,Chinese enterprise pollution data,and China Intellectual Property Patent,List of overseas investment companies and Thomson global mergers from 1998 to 2009 year,and uses the corporate-level pollution emissions as undesired output,and industrial water and coal consumption as energy inputs.At the same time,this paper chooses the behavior of Chinese companies' first outward foreign direct investment,including greenfield investment and cross-border mergers and acquisitions,and establishes a multi-point double difference(DID)model.The research results find that,on the one hand,outward foreign direct investment promotes the growth of the green total factor productivity of home country enterprises.The above results meet the parallel trend test,and the dynamic effects shows an increasing trend.Meanwhile,this paper puts the Ministry of Commerce's industrial policy of the 2004 year as an exogenous shock,and encourages enterprises to invest directly abroad as the exogenous policy impact,and this paper analyses and the endogenous test is consistent with the benchmark result.At the same time,the mechanism test finds that outward foreign direct investment mainly promotes the improvement of the green total factor productivity of enterprises through three transmission paths,such as the technological innovation,economies of scale,and technological complexity.On the other hand,in the analysis of the enterprise heterogeneity,firstly,in terms of the location of the host country,the outward foreign direct investment of the enterprises in developed countries has significantly and positively promoted the growth of the green total factor productivity of the enterprises in the home country;regardless of whether the host country belongs to the Belt and Road initiative.In countries or regions,outward foreign direct investment has increased the enterprises' growth of the green total factor productivity;Second,in terms of the domestic location distribution,outward foreign direct investment has mainly promoted the growth of the green total factor productivity in the central region;Thirdly,in the dimension of the industry factors,this paper finds the outward foreign direct investment has mainly promoted the growth of green total factor productivity in capital and technology-intensive,strategic emerging industries,and high-tech and complex enterprises;Fourthly,in the corporate dimension,whether it is a state-owned,private or foreign-funded enterprise,China's outward direct foreign direct investment has promoted the growth of the green total factor,and market,technology and resource-seeking enterprises' outward investment has a stronger effect on promoting green total factor productivity,compared with greenfield investment,cross-border mergers and acquisitions have a stronger effect on promoting green total factor productivity of the enterprises stronger.Finally,this paper bases on the above conclusions and proposes corresponding policy recommendations.First of all,we must promote the formation of a new pattern of outward foreign investment development,give full play to the government's guiding role in outward foreign direct investment regions,and steadily promote the government's demonstration effect and activeness in the outward foreign direct investment industry.At the same time,we should encourage the enterprises to enhance the quality and performance of outward foreign direct investment;Secondly,we also should promote the high-quality coordinated green development of China's outward foreign direct investment and the economy,and promote regional high-quality green development from a regional perspective,and give full play to the space of outward foreign direct investment for green total factor productivity spillover effects,and adjust the high-quality development of the green total factor productivity under different environmental regulations.In the manufacturing dimension.And focus on accelerating the transformation and upgrading of the manufacturing industry structure,develop strategic emerging industries,and enhance the depth of the manufacturing industry chain and the height of the value chain;On the corporate dimension,companies should encouraged to increase their overseas investment along the Belt and Road Initial,so as to optimize their overseas investment model,promote high-quality development of enterprises,and achieve green transformation and upgrading of enterprises.