Industrial environmental efficiency, foreign direct investment and export - Evidence from 30 provinces in China

As the largest trading nation in the world, China is fast becoming a leading champion of free trade and market economics. China attracts huge foreign direct investment (FDI) and exports many kinds of products. However, China's environmental problems caused by FDI and exports have also attracted wide attention. In this study, the impacts of FDI and export on industrial environmental efficiency are examined based on the data of 30 provinces in China from 2007 to 2016. Industrial environmental efficiency is measured by the method named slack-based measure-data envelopment analysis. Then, a regression model is employed to estimate the impacts of FDI and export on industrial environmental efficiency. This research finds that the relationship between FDI and industrial environmental efficiency presents U-shape and is located on the left side of the U-shape curve. FDI reduces industrial environmental efficiency. Moreover, there is a U-shape relationship between export and industrial environmental efficiency and export has a significant negative impact on industrial environmental efficiency in China. In the future, China should improve environmental standards and reduce highly pollutive FDI and export. The government should continue upgrading the level of industrialization for promoting the scale of industrial agglomeration. At the same time, China should encourage industrial enterprises to apply clean energy and new energy technology for improving energy efficiency. (C) 2018 Published by Elsevier Ltd.