Research on the Impact of Foreign Direct Investment Quality on Green Total Factor Productivity: Evidence from China

Guo Y., Song H., Luo Z., Zeng Y., IŞIK C., Yan J.

Polish Journal of Environmental Studies, vol.33, no.5, pp.4573-4584, 2024 (SCI-Expanded) identifier

  • Publication Type: Article / Article
  • Volume: 33 Issue: 5
  • Publication Date: 2024
  • Doi Number: 10.15244/pjoes/178453
  • Journal Name: Polish Journal of Environmental Studies
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Scopus, Academic Search Premier, BIOSIS, CAB Abstracts, Central & Eastern European Academic Source (CEEAS), Environment Index, Greenfile, Public Affairs Index, Veterinary Science Database
  • Page Numbers: pp.4573-4584
  • Keywords: GMM, green development, green total factor productivity, quality of foreign direct investment, sustainable development
  • Anadolu University Affiliated: Yes


Green total factor productivity (GTFP) is an important indicator to measure the green development of the economy. In the context of increasing investment promotion, improving GTFP is an important means of promoting sustainable development. It is also an important way to promote low-carbon development. Based on the panel data of 29 provinces and cities in China (excluding Xinjiang, Tibet, Hong Kong, Macao and Taiwan) from 2011 to 2020, this paper adopts the entropy method to construct a comprehensive index of the quality of foreign direct investment (QFDI) and employs the systematic generalized method of moments (GMM) to estimate the impact of QFDI on GTFP. Meanwhile, this paper also uses the threshold model for further testing. The results show that QFDI has a significant positive effect on China’s GTFP. In terms of dimensions, foreign capital with high technology spillover ability, high management level and high profitability has a significant promoting effect on GTFP. However, the positive effect of foreign capital scale is weak. And foreign capital export capacity has no significant effect on GTFP. The impact of QFDI on GTFP has a single threshold effect based on human capital and R&D investment. From a regional perspective, QFDI has a greater role in promoting GTFP in coastal areas than in inland areas. This paper provides important suggestions for policymakers to improve foreign investment policies and promote green development.