Examining the Drivers of Carbon Intensity: China’s Outward Foreign Direct Investment in the RCEP

Haocheng He; Chukiat Chaiboonsri; Anuphak Saosaovaphak

doi:10.47814/ijssrr.v9i1.3236

Haocheng He Faculty of Economics, Chiang Mai University, Chiang Mai, 50200, Thailand
Chukiat Chaiboonsri Faculty of Economics, Chiang Mai University, Chiang Mai, 50200, Thailand
Anuphak Saosaovaphak Faculty of Economics, Chiang Mai University, Chiang Mai, 50200, Thailand

DOI: https://doi.org/10.47814/ijssrr.v9i1.3236

Keywords: China's OFDI; Carbon Intensity; RCEP; CS-ARDL; Technology Spillover; Environmental Economics

Abstract

This study analyzes the impact of China's outward foreign direct investment (OFDI) on carbon intensity in RCEP countries (2003–2023). Grounded in environmental economics theory, it distinguishes between short-term and long-term effects using a CS-ARDL model that accounts for cross-country interdependence. Results show that while OFDI may temporarily increase carbon intensity due to economic expansion, it significantly reduces carbon intensity in the long run through technology transfer and industrial upgrading. The significant error correction term confirms gradual adjustment toward sustainable equilibrium. These findings support the pollution halo hypothesis in the RCEP context and offer evidence-based insights for promoting green investment under regional cooperation frameworks.

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