FDI, Spillover Effect and Green Total Factor Productivity (GTFP) - Research from the Perspective of Regional Heterogeneity

Abstract

The report of the 19th National Congress of the Communist Party of China emphasized the need to promote green development and strengthen the environmental protection system. China’s introduction of foreign investment has gradually shifted from emphasis on “quantity” to “quality” in the context of the new normal. In view of this, this paper discussed the mechanism of impact of FDI on China’s regional GTFP with the relationship between FDI and the regional GTFP as the logic starting point. The research results show that FDI has in general exerted a “pollution halo” effect in China, which affects the regional GTFP through technology and human capital spillover effects; FDI has non-linear impact on GTFP at different levels of environmental regulation and marketization; “pollution haven", “bottom line competition” and other phenomena will occur at low levels of environmental regulation and marketization; FDI will inhibit the increase in China’s regional GTFP; the impact of FDI on GTFP is regionally different, and the western and northeastern regions are “pollution havens” in China.