An anatomy of China's eco-efficiency gains: the role of FDI*. Issue 1 (3rd April 2017)

• Record Type: Journal Article
• Authors: Lu, Chia-Hui; Pang, Yu
• Is Part Of: Asia-Pacific journal of accounting & economics. Volume 24:Issue 1/2(2017)
• Page Start: 106
• Page End: 126
• Publication Date: 2017-04-03
• Subjects: foreign direct investment -- eco-efficiency -- spillovers -- China; F18 -- F64 -- Q56; Accounting -- Periodicals; Accounting -- Pacific Area -- Periodicals; Economics -- Periodicals; Pacific Area -- Economic conditions -- Periodicals; 657
• DOI: 10.1080/16081625.2015.1062244
• Languages: English
• ISSNs: 1608-1625

Abstract

Abstract : This paper quantifies the role of FDI in the remarkable fivefold gains in eco-efficiency in China's manufacturing during the period 1995–2006. We refine the conventional index decomposition method and apply it to China's emission. We find that (i) foreign-invested enterprises (FIEs) have shifted production toward cleaner industries; (ii) the better abatement technique of FIEs explains 23% of the eco-efficiency gains; and (iii) another 69% of the eco-efficiency gains come from by progress in domestic firms' abatement technique, which is associated with forward environmental spillovers from FIEs. Findings (ii) and (iii) lend support to the so-called Pollution Halo Hypothesis .