Impact of FDI on industrial structure upgrading under green technology innovation in Jiangsu, China
Abstract
Industrial structure upgrading plays an important role in improving economic development efficiency. Taking Jiangsu as the study subject, the paper selects panel data from 2005 to 2018 and performs dynamic panel models and threshold models to analyze the influence mechanism of foreign direct investment (FDI) and green technology innovation on industrial structure upgrading (including rationalization and advancement). The results show that FDI acts negatively on industrial structure upgrading, exhibiting U-shaped relationship with advancement, in contrast, green technology innovation shows a positive contribution to upgrading. In addition, rationalization is limited by fixed assets growing but increases with rising education levels. An increase in fixed assets and education both have a positive effect on advancement. Further, FDI plays a facilitating role in advancement considering the positive moderating effect of green technology innovation. Therefore, the study provides a theoretical reference for the development path of foreign investment and industrial structure upgrade breakthrough in Jiangsu.
Keyword : FDI, green technology innovation, industrial structure upgrading, dynamic panel models, panel threshold model
How to Cite
Wang, S., Zhou, H., & Tian, K. (2023). Impact of FDI on industrial structure upgrading under green technology innovation in Jiangsu, China. Journal of Environmental Engineering and Landscape Management, 31(3), 206–218. https://doi.org/10.3846/jeelm.2023.18486
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Lin, C. Y., & Kong, F. C. (2016). Technological innovation, imitation innovation and technology introduction and industrial structure transformation and upgrading — A study based on dynamic spatial Durbin model. Macroeconomic Research, 5, 106–118.
Lin, P., Liu, Z., & Zhang, Y. (2009). Do Chinese domestic firms benefit from FDI inflow? China Economic Review, 20(4), 677–691. https://doi.org/10.1016/j.chieco.2009.05.010
Liu, Z. Z., & Wang, F. Y. (2021). The impact of green science and technology innovation, financial investment on industrial structure upgrading — An empirical analysis based on data in Yangtze River Economic Belt during 2003-2019. Science & Technology Progress and Policy, 38(4), 53–61.
Luan, S. Z. (2018). Foreign trade, foreign direct investment and industrial structure optimization. Industrial Technology Economics, (1), 86–92.
Meyer, K. E. (2004). Perspectives on multinational enterprises in emerging economies. Journal of International Business Studies, 35(4), 259–276. https://doi.org/10.1057/palgrave.jibs.8400084
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Rauscher, E. (2015). Educational expansion and occupational change: US compulsory schooling laws and the occupational structure. Social Force, 93(4), 1850–1930. https://doi.org/10.1093/sf/sou127
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Song, H., Zhang, G. L., Liu, C. J., & Yang, L. G. (2020). A study on the effect of environmental regulation on the optimization of provincial industrial structure in China. Scientific Decision Making, (9), 65–85.
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Wu, N., & Liu, Z. K. (2021). Higher education development, technological innovation and industrial structure upgrade. Technological Forecasting and Social Change, 162, 1–9. https://doi.org/10.1016/j.techfore.2020.120400
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Xu, W. X., Zheng, J. H., & Liu, C. J. (2020). Environmental regulation, green technology innovation and urbanization efficiency — Based on spatial econometrics and threshold effect perspective. Journal of Zhejiang University of Technology (Social Science Edition), 19(1), 31–38.
Yang, H. L., Liang, L. X., Zeng, Q. J., & Zhong, C. L. (2019). Foreign trade, FDI and industrial structure optimization and upgrading — An empirical study based on Chongqing data. Journal of Guizhou Business School, 32(2), 35–44.
Yang, Z. Y. (2018). SYS-GMM analysis of the impact of FDI on manufacturing industry structure — Based on provincial industry dynamic panel data. Macroeconomic Research, (8), 85–93.
Ye, C. S., Shu, Y. W., & Luo, L. F. (2020). An empirical study of influence of two-way FDI on changes in industrial structure — An exploration on the path to promoting high-quality development through high-level opening-up. Southeast Academic Research, (2), 153–163+248.
Yin, D. D., & Zhang, J. Q. (2016). Research on the reverse technology spillover effect of China’s OFDI — An empirical analysis based on absorptive capacity perspective. International Trade Issues, (1), 109–120.
Yuan, Y. J., & Xie, R. H. (2015). The intrinsic connection between industrial agglomeration, technological innovation and environmental pollution. Scientific Research, 33(9), 1340–1347.
Zameer, H., Shahbaz, M., & Vo, X. V. (2020). Reinforcing poverty alleviation efficiency through technological innovation, globalization, and financial development. Technological Forecasting and Social Change, 161, 1–10. https://doi.org/10.1016/j.techfore.2020.120326
Zhang, L. (2016). Two-way FDI, financial development and industrial structure optimization in China. World Economic Studies, (10), 111–124.
Zhang, Z. D., & Liao, C. W. (2019). Regional marketization, technological innovation and industrial upgrading in the Yangtze River Economic Belt. Industrial and Economic Review, (5), 94–107.
Zheng, X. Y., Zhang, Y. Y., Ma, B., & Zhang, L. (2018). Globalization and income inequality: New evidence and mechanisms from China. Economic Research Journal, 53(8), 132–146.
Zhou, D. S., Li, S. M., & David, K. T. (2002). The impact of FDI on the productivity of domestic firms: The case of China. International Business Review, 11, 465–484. https://doi.org/10.1016/S0969-5931(02)00020-3
Zhou, J. Q., & Zhang, Y. (2021). FDI, economic agglomeration and green economic efficiency — A theoretical analysis and China’s experience. International Economics and Trade Research, 37(1), 66–82.
Arellano, M. (1991). Some tests of specification for panel data: Montecarlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277–297. https://doi.org/10.2307/2297968
Athreye, S., & Cantwell, J. (2007). Creating competition? Globalisation and the emergence of new technology producers. Research Policy, 36(2), 209–226. https://doi.org/10.1016/j.respol.2006.11.002
Braun, E., & Wield, D. (1994). Regulation as a means for the social control of technology. Technology Analysis & Strategic Management, 6(3), 259–272. https://doi.org/10.1080/09537329408524171
Chanegriha, M., Stewart, C., & Tsoukis, C. (2020). Testing for causality between FDI and economic growth using heterogeneous panel data. The Journal of International Trade & Economic Development, 29(5), 546–565. https://doi.org/10.1080/09638199.2019.1704843
Chen, V. Z., Li, J., & Daniel, M. S. (2011). International reverse spillover effects on parent firms: Evidences from emerging market MNEs in developed markets. European Management Journal, 30(3), 204–218. https://doi.org/10.1016/j.emj.2012.03.005
Chen, W. X., & Zhou, M. S. (2017). Autonomous innovation, technology introduction and industrial structure upgrading — An empirical analysis of provincial panel data based on externality perspective. Journal of Yunnan University of Finance and Economics, (4), 34–44.
Dechezleprêtre, A., & Sato, M. (2017). The impacts of environmental regulations on competitiveness. Review of Environmental Economics and Policy, 11(2), 183–206. https://doi.org/10.1093/reep/rex013
Driffield, N., & Love, J. H. (2007). Linking FDI motivation and host economy productivity effects: Conceptual and empirical analysis. Journal of International Business Studies, 38(3), 460–473. https://doi.org/10.1057/palgrave.jibs.8400268
Du, J., Liu, Y., & Diao, W. (2019). Assessing regional differences in green innovation efficiency of industrial enterprises in China. International Journal of Environmental Research and Public Health, 16(6), 1–23. https://doi.org/10.3390/ijerph16060940
Du, K. R., & Li, J. L. (2019). Towards a green world: How do green technology innovations affect total-factor carbon productivity. Energy Policy, 131, 240–250. https://doi.org/10.1016/j.enpol.2019.04.033
Greunz, L. (2004). Industrial structure and innovation-evidence from European regions. Journal of Evolutionary Economics, 14(5), 563–592. https://doi.org/10.1007/s00191-004-0234-8
Hai, J. T., & Li, X. (2021). Government’s optimal subsidies during the adoption of green production under uncertain demand. Chinese Journal of Management Science, 29(5), 180–189.
Han, L. D., Shi, D. Y., & Zhang, W. (2020). Technological innovation and industrial greening: Mechanisms of action and empirical tests. Inquiry into Economic Issues, (5), 176–190.
Hansen, B. E. (1999). Threshold effects in non-dynamic panels: Estimation, testing, and inference. Journal of Econometrics, 93(2), 345–368. https://doi.org/10.1016/S0304-4076(99)00025-1
He, Q. (2007). Openness and TFP growth: An empirical study based on the inter-provincial panel data in China. China Economic Quarterly, 6(4), 1127–1142.
Hu, Y., & Zhang, L. (2021). FDI, environmental regulation, and industrial structure upgrading: Empirical evidence from Yangtze River Delta. East China Economic Management, 35(9), 31–38.
Huang, L., & Wu, C. Q. (2019). Efficiency of industrial green innovation development in Yangtze River Economic Belt and its synergistic effect. Journal of Chongqing University (Social Science Edition), 25(3), 1–13.
Jia, C. C., & Chen, S. Y. (2018). The impact of technological innovation on industrial structure transformation and upgrading under the new normal – an empirical test based on inter-provincial panel data from 2011–2015. Science and Technology Management Research, (15), 26–31.
Jia, N. S., & Han, Y. H. (2018). Foreign direct investment, outward foreign direct investment and industrial structure upgrading — An analysis based on non-parametric panel model. Exploration on Economic Issues, (2), 142–152.
Jin, W. (2021). Path dependence, self-fulfilling expectations, and carbon lock-in. Resource and Energy Economics, 66, 101263. https://doi.org/10.1016/j.reseneeco.2021.101263
Li, G. X., Zhang, W., & Wang, Y. J. (2016). OFDI, environmental regulation and green technology innovation in China. Science and Technology Management Research, 36(13), 227–231.
Li, R. Q. (2020). Does marketization enhance the effectiveness of environmental regulation? — A retest of Porter’s hypothesis based on the perspective of green technology innovation. Journal of Southwest University of Political Science and Law, 22(2), 125–139.
Li, T. H., & Dong, H. (2018). An empirical study on the relationship between technological innovation and industrial structure based on LSTAR model. China Soft Science, (6), 151–162.
Lin, C. Y., & Kong, F. C. (2016). Technological innovation, imitation innovation and technology introduction and industrial structure transformation and upgrading — A study based on dynamic spatial Durbin model. Macroeconomic Research, 5, 106–118.
Lin, P., Liu, Z., & Zhang, Y. (2009). Do Chinese domestic firms benefit from FDI inflow? China Economic Review, 20(4), 677–691. https://doi.org/10.1016/j.chieco.2009.05.010
Liu, Z. Z., & Wang, F. Y. (2021). The impact of green science and technology innovation, financial investment on industrial structure upgrading — An empirical analysis based on data in Yangtze River Economic Belt during 2003-2019. Science & Technology Progress and Policy, 38(4), 53–61.
Luan, S. Z. (2018). Foreign trade, foreign direct investment and industrial structure optimization. Industrial Technology Economics, (1), 86–92.
Meyer, K. E. (2004). Perspectives on multinational enterprises in emerging economies. Journal of International Business Studies, 35(4), 259–276. https://doi.org/10.1057/palgrave.jibs.8400084
Nie, A. Y., & Lu, C. P. (2012). Institutional constraints, foreign investment and industrial restructuring — An empirical study based on inter-provincial panel data. International Trade Issues, (2), 136–145.
Qi, S. Z., Lin, S., & Cui, J. B. (2018). Do environmental rights trading schemes induce green innovation? Evidence from listed firms in China. Economic Research Journal, 12, 129–143.
Rauscher, E. (2015). Educational expansion and occupational change: US compulsory schooling laws and the occupational structure. Social Force, 93(4), 1850–1930. https://doi.org/10.1093/sf/sou127
Shan, S., Gen, S. Y., Kamran, H. W., & Dinca, G. (2021). Role of green technology innovation and renewable energy in carbon neutrality: A sustainable investigation from Turkey. Journal of Environmental Management, 294, 113004. https://doi.org/10.1016/j.jenvman.2021.113004
Shang, L. N., Tan, D. Q., Feng, S. L., & Zhou, W. T. (2022). Environmental regulation, import trade, and green technology innovation. Environmental Science and Pollution Research, 29, 12864–12874. https://doi.org/10.1007/s11356-021-13490-9
Song, H., Zhang, G. L., Liu, C. J., & Yang, L. G. (2020). A study on the effect of environmental regulation on the optimization of provincial industrial structure in China. Scientific Decision Making, (9), 65–85.
Tang, L., Zhang, Y., Gao, J., & Wang, F. (2020). Technological upgrading in Chinese cities: The role of FDI and industrial structure. Emerging Markets Finance and Trade, 56(7), 1547–1563. https://doi.org/10.1080/1540496X.2018.1562900
Tian, X. M., Lo, V. I., & Song, M. X. (2016). The ‘insider’ and ‘outsider’ effects of FDI technology spillovers: Some evidence. The Journal of Developing Areas, 50(5), 1–12. https://doi.org/10.1353/jda.2016.0039
Wang, G. Y., Xu, Y. Y., Wang, Y. Y., & Li, X. Y. (2016). Analysis of the impact of China’s science and technology innovation on industrial transformation and upgrading. East China Economic Management, (3), 83–90.
Wang, J. (2014). A study on the threshold effect of FDI to promote the optimization of industrial structure in various regions of China. World Economic Research, (3), 73–79.
Wang, Q. Y., Zhang, M., & Wang, W. W. (2021). Analysis of the impact of foreign direct investment on urbanization in China from the perspective of “circular economy”. Environmental Science and Pollution Research, 28, 22380–22391. https://doi.org/10.1007/s11356-020-12321-7
Wu, G. Q. (2016). Analysis of the mechanism and countermeasures of FDI influencing the transformation and upgrading of China’s industrial structure. Statistics and Decision Making, (18), 151–154.
Wu, N., & Liu, Z. K. (2021). Higher education development, technological innovation and industrial structure upgrade. Technological Forecasting and Social Change, 162, 1–9. https://doi.org/10.1016/j.techfore.2020.120400
Xie, R., Yuan, Y., & Huang, J. (2017). Different types of environmental regulations and heterogeneous influence on “green” productivity: Evidence from China. Ecological Economics, 132, 104–112. https://doi.org/10.1016/j.ecolecon.2016.10.019
Xie, T., Li, Y. M., & Pan, Y. (2018). Foreign direct investment, technological progress and industrial structure upgrading — Based on a spatial econometric analysis of Chinese provinces. Industrial Technology Economics, (8), 35–43.
Xu, W. X., Zheng, J. H., & Liu, C. J. (2020). Environmental regulation, green technology innovation and urbanization efficiency — Based on spatial econometrics and threshold effect perspective. Journal of Zhejiang University of Technology (Social Science Edition), 19(1), 31–38.
Yang, H. L., Liang, L. X., Zeng, Q. J., & Zhong, C. L. (2019). Foreign trade, FDI and industrial structure optimization and upgrading — An empirical study based on Chongqing data. Journal of Guizhou Business School, 32(2), 35–44.
Yang, Z. Y. (2018). SYS-GMM analysis of the impact of FDI on manufacturing industry structure — Based on provincial industry dynamic panel data. Macroeconomic Research, (8), 85–93.
Ye, C. S., Shu, Y. W., & Luo, L. F. (2020). An empirical study of influence of two-way FDI on changes in industrial structure — An exploration on the path to promoting high-quality development through high-level opening-up. Southeast Academic Research, (2), 153–163+248.
Yin, D. D., & Zhang, J. Q. (2016). Research on the reverse technology spillover effect of China’s OFDI — An empirical analysis based on absorptive capacity perspective. International Trade Issues, (1), 109–120.
Yuan, Y. J., & Xie, R. H. (2015). The intrinsic connection between industrial agglomeration, technological innovation and environmental pollution. Scientific Research, 33(9), 1340–1347.
Zameer, H., Shahbaz, M., & Vo, X. V. (2020). Reinforcing poverty alleviation efficiency through technological innovation, globalization, and financial development. Technological Forecasting and Social Change, 161, 1–10. https://doi.org/10.1016/j.techfore.2020.120326
Zhang, L. (2016). Two-way FDI, financial development and industrial structure optimization in China. World Economic Studies, (10), 111–124.
Zhang, Z. D., & Liao, C. W. (2019). Regional marketization, technological innovation and industrial upgrading in the Yangtze River Economic Belt. Industrial and Economic Review, (5), 94–107.
Zheng, X. Y., Zhang, Y. Y., Ma, B., & Zhang, L. (2018). Globalization and income inequality: New evidence and mechanisms from China. Economic Research Journal, 53(8), 132–146.
Zhou, D. S., Li, S. M., & David, K. T. (2002). The impact of FDI on the productivity of domestic firms: The case of China. International Business Review, 11, 465–484. https://doi.org/10.1016/S0969-5931(02)00020-3
Zhou, J. Q., & Zhang, Y. (2021). FDI, economic agglomeration and green economic efficiency — A theoretical analysis and China’s experience. International Economics and Trade Research, 37(1), 66–82.