The two faces of FDI in environmental performance: a meta-analysis of empirical evidence in China

Abstract

The extant literature has raised debates concerning environmental performance of foreign direct investment (FDI) in China. We applied meta-analysis of 121 estimates reported in 40 studies to quantitatively synthesize our knowledge and understanding of the topic. Our findings indicate that FDI leads to better environmental performance through a pollution abatement effect, but not through enhancements in green total factor productivity. The meta-regression analysis reveals that the degree of environmental pollution abatement effects is moderated by environmental regulations, FDI measurement, and the consideration of endogeneity in empirical estimations. The results are discussed with references to scholarly and practical implications.