Energy infrastructure and foreign direct investment in china

Abstract

China's integration into the world economy, and maintaining its rapid economic growth, demand more energy with a prominent concern of reducing carbon footprints. Keeping in view the shortcomings in previous studies, we investigate the relationship between energy infrastructure and foreign direct investment in China in the framework of the ARDL and VECM approaches. We found that energy positively affects FDI, while the reverse effect does not hold. FDI does not affect the energy sector. Policy implications can be drawn from this study, such as technological diffusion from FDI to enhance energy efficiency and reduce carbon footprints. © 2020 by author(s) and VsI Entrepreneurship and Sustainability Center.