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Going global, going green: How outward FDI enhances corporate green innovation

Huahua Ge, Zaixin Chen, Pengfei Gao Orcid Logo, Chenbo Wang

Finance Research Letters, Volume: 82, Start page: 107554

Swansea University Author: Pengfei Gao Orcid Logo

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DOI (Published version): 10.1016/j.frl.2025.107554

Abstract

Green innovation is critical for firms pursuing sustainable growth amid intensifying environmentalpressures. This study examines the impact of outward foreign direct investment (OFDI) ongreen innovation activities using panel data on Chinese listed firms from 2003 to 2022. We focuson two moderating...

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Published in: Finance Research Letters
ISSN: 1544-6123
Published: Elsevier BV 2025
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa69572
Abstract: Green innovation is critical for firms pursuing sustainable growth amid intensifying environmentalpressures. This study examines the impact of outward foreign direct investment (OFDI) ongreen innovation activities using panel data on Chinese listed firms from 2003 to 2022. We focuson two moderating mechanisms: reverse technology spillovers from host countries and the intensityof home-country environmental regulation. Results show that OFDI significantly enhancesgreen patent activity, with stronger effects observed in firms exposed to advanced foreign R&Denvironments and stricter domestic regulatory conditions. Heterogeneity analysis further revealsthat the OFDI effect is more pronounced in technology-intensive firms, low-pollution industries,and inland regions. These findings offer new evidence on how international expansion, whencombined with supportive institutional and technological contexts, can promote environmentalinnovation in emerging markets.
Keywords: Outward foreign direct investment; Green innovation; Reverse technology spillover; Local environmental regulation
College: Faculty of Humanities and Social Sciences
Start Page: 107554

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