GTAP Resources: Resource Display
| GTAP Resource #7166 |
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"Responses of China’s Cross-border Investors to Domestic Environmental Regulations" by Lin, Kang, Kailan Tian, Xiang Gao, Yu Zhao and Cuihong Yang Abstract Environmental regulations have been widely imposed to foster the development of a green and sustainable economy. However, how cross-border investors respond to domestic environmental regulations (DERs) has not been well studied. This paper examines how firms respond to DERs by focusing on the effects on outward direct investment (ODI) and productivity, using the data of Chinese listed companies during 2012-2018. The regression results support that DERs significantly boost ODI through encouraging firms to transfer production to countries with less stringent environmental regulations, acquiring advanced technologies from developed economies, and increasing research and development (R&D) expenditures. The latter two responses also contribute significantly to firms’ productivity improvement while the first cannot. We conduct a series of heterogeneity analyses and find that firms with high financing constraints, non-state-owned firms and high-polluting firms facing stringent DERs tend to opt for the first response. Our study sheds light on how Chinese firms navigate DERs and the diverse strategies they employ to respond to these regulatory pressures. |
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- Environmental policies - Trade and the environment - Domestic policy analysis - Foreign direct investment - Econometric methods - Asia (East) |
| Attachments |
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If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.
Public Access  Paper (1.7 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
