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Outward foreign direct investment and energy efficiency: firm-level evidence from China

Xi Lin et al.

Environment and Development Economics2025https://doi.org/10.1017/s1355770x24000275article
AJG 2ABDC B
Weight
0.44

Abstract

Energy inefficiency and environmental damages caused by this inefficiency are increasingly common in developing countries. As the largest developing country, China is experiencing a rapid growth in outward foreign direct investment (OFDI). Do OFDI firms have higher energy efficiency in the same sector? After OFDI, how does the energy efficiency of the firms change? In this study, we employ the data from Chinese industrial firms to empirically investigate these questions. Our results show that OFDI firms have higher energy efficiency and total factor energy efficiency (TFEE) relative to non-OFDI firms in the same sector. After OFDI, firms improve energy efficiency and TFEE through expanding output scale. In addition, these effects are found to be heterogeneous in terms of energy types as well as OFDI motivations and destinations. In general, this study provides some initial evidence for the relationship between OFDI and energy performance at the firm level.

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https://doi.org/https://doi.org/10.1017/s1355770x24000275

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@article{xi2025,
  title        = {{Outward foreign direct investment and energy efficiency: firm-level evidence from China}},
  author       = {Xi Lin et al.},
  journal      = {Environment and Development Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1017/s1355770x24000275},
}

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Evidence weight

0.44

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.32 × 0.4 = 0.13
M · momentum0.57 × 0.15 = 0.09
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.