Does the Carbon Emission Trading Policy Promote Foreign Direct Investment?: A Quasi-Experiment From China

As an important policy to promote global energy transition and carbon emission reduction, does the carbon emission trading policy help promote foreign direct investment inflows, thus alleviating the contradiction between environment and economic development? Based on the “OLI paradigm,” by using the data of China’s 30 provinces from 2007 to 2016 and taking China’s pilot implementation carbon emission transaction policy in 2013 as the natural experiment, so as to construct a differences-in-differences model, this study empirically analyzed the impact of carbon emission transaction policies on foreign direct investment and conducted an in-depth analysis and discussion on related heterogeneity. The empirical results show that 1) there is a positive correlation between the carbon emission trading policy and foreign direct investment; 2) the results of heterogeneity analysis show that the effect of carbon emission trading policy on the increase in FDI is more significant in the areas with a stronger environmental regulation, a higher degree of marketization, and low energy consumption. The conclusions of this study enrich the analysis of the effectiveness of government environmental policies from the perspective of both environment and economic development and provide relevant policy enlightenment for developing countries in environmental regulation and attracting foreign direct investment.Systematic Review Registration: [website], identifier [registration number].

Nexus Between Foreign Direct Investment Inflow, Renewable Energy Consumption, Ambient Air Pollution, and Human Mortality: A Public Health Perspective From Non-linear ARDL Approach

A huge foreign direct investment (FDI) inflow has been witnessed in China, though on the one hand, it brings a significant contribution to economic growth. On the other hand, it adversely affects the ambient air pollution that may affect human mortality in the country. Renewable energy (RE) usage meets the country's energy needs with no adverse effect on the environment. Therefore, this study is trying to empirically analyze the effect of FDI inflow on human morality and RE consumption in China. We used time-series data for 1998–2020 and applied a non-linear ARDL approach for the estimations. The empirical outcomes suggest that FDI inflow positively affects mortality and RE. There is also unidirectional causality running from RE and pollution to mortality. In addition, the relationship among the variable verifies the existence of a non-linear relationship. The government needs policy guidelines to further boost FDI inflow due to its positive aspects. However, to reduce the negative effect on the environment and human morality, the extensive usage of RE should be adopted. Indeed, proper legislation for foreign firms might be a good step toward quality environmental and longevity of human health in society.

Is Home-Host Cultural Distance a Risk? Evidence from Outward Foreign Direct Investment by Chinese Enterprises

Cultural distance is always regarded as a “risk” in the decision making of enterprises involved in the outward foreign direct investment (OFDI), however, investment is a powerful driver of productivity growth and increased innovation capacity of enterprises in both countries. Is cultural distance a “risk” ? Using Hofstede's indicators and the Kogut and Singh index (1988), this paper calculates the cultural distance based on six cultural dimensions and further examines the effect of cultural distance on the outward foreign direct investment by Chinese enterprises and its mediating effects on the role of other factors influencing the decisions of multinationals. The results indicate that there is a nonlinear effect of cultural distance and the mediating effect of cultural distance is negative.

The Link between Tax Revenue Components and Economic Growth: Evidence from South Africa. An ARDL Approach

This study examined the link between tax revenue components and economic growth in South Africa, utilizing time series data for the period of 22 years. The stationarity of the variables was established using the Phillips-Perron (PP) unit root test, and the existence of long-run and short-run equilibrium conditions was tested using the Autoregressive Distributed Lag (ARDL) model. As a proxy for economic growth, the study used the real GDP growth rate as the dependent variable, with company income tax, personal income tax, taxes on international trade and transactions, taxes on income, profits, and capital gains tax, foreign direct investment, inflation, and gross savings as the independent variables. According to the PP findings, none of the variables are integrated at a higher order than one, i.e. (1). All variables are found to be cointegrated, and all explanatory variables have a long-run link with economic growth. According to the ARDL findings, company income tax, personal income tax, and taxes on international trade and transactions all have a positive long-run and short-run link with economic growth, whereas capital gain tax, foreign direct investment, and gross savings all have a negative long-run and short-run link with economic growth. The long-run coefficient is negatively related to RGDP, while the short-run coefficient revealed a positive link between inflation and economic growth, among other findings. Heteroskedasticity and autocorrelation are not present in our model, according to diagnostic tests. The CUSUM and CUSUMSQ values indicate that the model is structurally sound.