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Outward foreign direct investment and green innovation in Chinese multinational companies
Institution:1. School of Economics, Hefei University of Technology, Hefei 230000, China;2. Business School, The University of Western Australia, Perth, WA 6009, Australia;1. UECE/REM, ISEG, Universidade de Lisboa, Portugal;2. ADVANCE/CSG, ISEG, Universidade de Lisboa, Portugal;1. College of Law and Business, 26, Ben-Gurion St., Ram-Gan, Israel;2. Arison School of Business, Reichman University (IDC Herzliya), 8 HaUniversita st, Herzliya 4610101, Israel;3. Gies College of Business, University of Illinois at Urbana-Champaign, 330 Wohlers Hall, 1206 S. 6th Street, MC-706, Champaign, IL 61820, USA;4. Alliance Manchester Business School, The University of Manchester, Booth St W, Manchester M15 6PB, United Kingdom;1. Department of Business and Economic Studies, University of Gävle, Sweden;2. Faculty of Economics, Shenzhen MSU-BIT University;3. School of Technology and Business Studies, Dalarna University, Sweden/ Center for International Business, Fundacao Getuilo Vargas, Brazil;4. Stockholm Business School, Stockholm University, Sweden;1. Swiss National Bank, Börsenstrasse 15, 8022 Zürich, Switzerland;2. Lee Kuan Yew School of Public Policy, National University of Singapore, 469C Bukit Timah Rd, 259772, Singapore;1. Graduate School of Future Strategy, KAIST, Daejeon 34141, Republic of Korea;2. Ministry of SMEs & Start-ups, Sejong 30121, Republic of Korea
Abstract:This paper investigates the reverse green innovation spillovers of outward foreign direct investment (OFDI) in Chinese multinational companies and how environmental regulation stringency in host countries moderates the relationship between OFDI and green innovation. The empirical analysis is based on an integrated dataset of publicly listed firms from 2008 to 2018. The findings demonstrate a significantly positive relationship between OFDI and the green innovation performance of multinational companies. It is also shown that environmental regulation stringency in host countries positively moderates the relationship between OFDI and green innovation. Further analysis reveals the variation of the findings across multinational companies in host countries at different development stages, with different ownership and in industries with different pollution intensities. The observations in this paper imply that the institutional environment of investment destinations matters for reverse technology spillovers, particularly reverse green technology spillovers from OFDI.
Keywords:Outward foreign direct investment  Green innovation  Environmental regulation stringency  Chinese multinational companies
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