Can foreign direct investment harness energy consumption in China? A time series investigation

Salim, Ruhul; Yao, Yao; Chen, George; Zhang, Lin

doi:10.1016/j.eneco.2017.05.026

Author(s)

Salim, Ruhul

Yao, Yao

Chen, George

Zhang, Lin

Publication Date

2017

Abstract

This study assesses the long-run relationship and short-run dynamics between foreign direct investment (FDI) and energy consumption in China. Applying the bounds testing approach to annual data from 1982 to 2012, we find that a stable FDI-energy nexus exists in the long run and a 1% increase in FDI reduces energy consumption by 0.21%.However, this study shows a positive association between FDI and energy consumption in the short run, attributing to the dominance of the scale effect. Our results remain robust to different measurements and estimators. It is suggested that the Chinese government shall support the inward FDI in the tertiary and energy sectors and strengthen local absorptive capacities to fully internalize FDI-related knowledge spillovers in energy conservation.

Citation

Energy Economics, v.66, p. 45-53

ISSN

1873-6181

0140-9883

Link

https://hdl.handle.net/1959.11/21475

Language

en

Publisher

Elsevier BV

Title

Can foreign direct investment harness energy consumption in China? A time series investigation

Type of document

Journal Article

Entity Type

Publication

Author(s)	Salim, Ruhul Yao, Yao Chen, George Zhang, Lin
Publication Date	2017
Abstract	This study assesses the long-run relationship and short-run dynamics between foreign direct investment (FDI) and energy consumption in China. Applying the bounds testing approach to annual data from 1982 to 2012, we find that a stable FDI-energy nexus exists in the long run and a 1% increase in FDI reduces energy consumption by 0.21%.However, this study shows a positive association between FDI and energy consumption in the short run, attributing to the dominance of the scale effect. Our results remain robust to different measurements and estimators. It is suggested that the Chinese government shall support the inward FDI in the tertiary and energy sectors and strengthen local absorptive capacities to fully internalize FDI-related knowledge spillovers in energy conservation.
Citation	Energy Economics, v.66, p. 45-53
ISSN	1873-6181 0140-9883
Link	https://hdl.handle.net/1959.11/21475
Language	en
Publisher	Elsevier BV
Title	Can foreign direct investment harness energy consumption in China? A time series investigation
Type of document	Journal Article
Entity Type	Publication

Can foreign direct investment harness energy consumption in China? A time series investigation

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