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Economic Growth, Foreign Direct Investment and CO2 Emissions in China: A Panel Granger Causality Analysis

Authors: Xiaoyu Tan; Hongfeng Peng; Yanli Li; Liqin Hu;

Economic Growth, Foreign Direct Investment and CO2 Emissions in China: A Panel Granger Causality Analysis

Abstract

Using a sample of province-level panel data, this paper investigates the Granger causality associations among economic growth (GDP), foreign direct investment (FDI) and CO2 emissions in China. By applying the bootstrap Granger panel causality approach (Kónya, 2006), we consider both cross-sectional dependence and homogeneity of different regions in China. The empirical results support that the causality direction not only works in a single direction either from GDP to FDI (in Yunnan) or from FDI to GDP (in Beijing, Neimenggu, Jilin, Shanxi and Gansu), but it also works in both directions (in Henan). Moreover, we document that GDP is Granger-causing CO2 emissions in Neimenggu, Hubei, Guangxi and Gansu while there is bidirectional causality between these two variables in Shanxi. In the end, we identify the unidirectional causality from FDI to CO2 emissions in Beijing, Henan, Guizhou and Shanxi, and the bidirectional causality between FDI and CO2 emissions in Neimenggu.

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Keywords

Environmental effects of industries and plants, foreign direct investment, TJ807-830, economic growth; foreign direct investment; CO<sub>2</sub> emissions, CO2 emissions, TD194-195, economic growth, Renewable energy sources, Environmental sciences, GE1-350

  • BIP!
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    citations
    This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    77
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Top 1%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    Top 10%
    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
    Top 10%
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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
77
Top 1%
Top 10%
Top 10%
gold