Outward Foreign Direct Investment,financial Development And Carbon Emissions

The establishment of the China-ASEAN Free Trade Area provides new opportunities for Chinese direct investment in ASEAN.As the AsiaPacific region deepens its economic and trade cooperation as well as external exchanges,along with the accelerated pace of China’s "going out",the ASEAN region is becoming a key area for Chinese companies to invest overseas.The level of financial development in ASEAN countries is an essential factor when choosing the location for outward foreign direct investment inflows,and also a powerful regulator to mitigate environmental degradation.A favourable financial environment could facilitate capital accumulation,optimise resource allocation and exploit the spillover effect of foreign direct investment,which directly or indirectly affects the relationship between China’s outward direct investment and ASEAN carbon emissions.Therefore,this paper aims to investigate the environmental effects of China’s direct investment in ASEAN,focusing on the impact of China’s foreign direct investment on carbon emissions in ASEAN countries and the moderating effect of financial development therein.This plays a vital role in promoting the green and sustainable development of China’s outward foreign direct investment as well as the sustainable economic development of ASEAN countries,allowing green to become the colour of cooperation between China and ASEAN,to realise the win-win development of China and ASEAN.After reviewing the related research works domestic and abroad,this paper adopts the combination of current situation analysis and empirical test to study the impact of Chinese outward direct investment on ASEAN carbon emissions as well as the moderating effect of financial development in it.First,a general insight is established on the current situation of Chinese direct investment,the current situation of ASEAN financial development and the current situation of ASEAN carbon emissions.Second,this paper takes ten ASEAN countries as the research target,based on the data from 2003 to 2020,adopting fixed effect model,moderating effect model and threshold model to study and analyse the relationship between outward foreign direct investment,financial development and carbon emissions.The empirical study reveals that:(1)Chinese outward foreign direct investment has a significant inhibitory effect on carbon emissions in ASEAN,confirming the "pollution halo hypothesis" in ASEAN.(2)Financial development has a remarkable dampening effect on carbon emissions in ASEAN,and financial development also has a positive moderating effect,which can enhance the dampening effect of Chinese outward foreign direct investment on carbon emissions in ASEAN.(3)To further explore the non-linear relationship between Chinese foreign direct investment in ASEAN and carbon emissions,this paper runs regressions with financial development as the threshold variable,and finds that a single threshold for the financial development scale and a double threshold for the financial development depth.In general,as the degree of financial development grows deeper,the inhibitory effect of Chinese outward foreign direct investment on ASEAN carbon emissions tends to strengthen.Finally,based on the summary of the current situation and the findings of the empirical study,policy recommendations are proposed based on the Chinese perspective and the ASEAN perspective.