The Green Halo Effect Of China’s OFDI

In 2013,China proposed the Belt and Road Initiative to strengthen connectivity between China and other regions in Asia,the Middle East,Africa and Europe.The Belt and Road Initiative aligns with the common interests of all parties concerned,follows the trend of regional and global cooperation,and has received positive responses from countries along the route.Meanwhile,along with implementing the Belt and Road Initiative,fast-growing China’s OFDI has become a unique scenery for constructing the "One Belt,One Road".However,there are many different voices in the international community about this initiative,believing that China’s investment in countries along the Belt and Road will cause the host countries along the Belt and Road to become "pollution havens".Therefore,is there a green halo effect of China’s OFDI on countries along the Belt and Road? Does this green halo effect have some asymmetry? And what is the inner mechanism?Therefore,based on the panel data of 56 countries along the Belt and Road from 2003 to 2019,this paper systematically examines the impact of China’s OFDI on green technology spillovers in host countries along the Belt and Road with the background of participating National Natural Science Foundation of China.First,this paper reviews and summarizes the literature on the relationship between FDI and green technology spillovers and reviews the existing studies.Second,it analyzes three aspects: the overall status of China’s OFDI,regional distribution and industry distribution of China’s OFDI.Further,a panel model is constructed to empirically test whether China’s OFDI can significantly promote green technology spillovers in host countries,and the heterogeneity of the countries along the Belt and Road is examined according to different income levels and degrees of openness to the outside world.In addition,the relative environmental regulation is used as a threshold variable to investigate how the environmental regulation gap specifically affects the "green halo effect" of China’s OFDI.Finally,this paper examines the transmission channels of the green technology spillovers of China’s OFDI to countries along the Belt and Road from three aspects: the scale effect,the structure effect and the cleaning effect.The main findings of this paper are as follows: First,China’s OFDI has a significant "green halo effect" on countries along the Belt and Road,and this "green halo effect" has positive asymmetric characteristics.China’s OFDI has a stronger green technology spillover effect on host countries with lower income levels and less openness.Second,strict relative environmental regulations can play a similar role as a "pressure pool",which significantly enhances the "green halo effect" of China’s OFDI.Third,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.The above findings point to the direction for host countries along the Belt and Road to capture green technology spillovers better.