Carbon emissions trading and global resource allocation: Evidence from China’s two-way FDI

IF 1.3 Q3 ECONOMICS

Research in Economics Pub Date : 2026-03-01 Epub Date: 2026-01-11 DOI:10.1016/j.rie.2026.101114

Chen Qi

{"title":"Carbon emissions trading and global resource allocation: Evidence from China’s two-way FDI","authors":"Chen Qi","doi":"10.1016/j.rie.2026.101114","DOIUrl":null,"url":null,"abstract":"<div><div>This article analyzes the impact of carbon emission trading policies on China's role in global resource allocation, with an emphasis on two-way foreign direct investment (FDI). The analysis used a difference-in-differences (DID) methodology to assess the effects of carbon emission trading on outward foreign direct investment (OFDI) and inward foreign direct investment (IFDI), utilizing panel data from 28 provinces spanning 2006 to 2020. The results indicate a fundamental reorientation of investment patterns, revealing that carbon trading significantly enhances OFDI while limiting IFDI. Regional variability is evident: increased OFDI benefits central provinces, while diminished IFDI and elevated compliance costs result in reduced investment in the western region. Upgrading promotes the increase of OFDI, whereas rationalization diminishes IFDI inflows, illustrating the moderating effect of industrial structure. These results indicate that the carbon price serves several functions, including environmental regulation, facilitating economic transformation, and wealth transfer. The study's findings can assist policymakers in China and beyond in aligning environmental objectives with economic competitiveness by offering new empirical data linking carbon markets to foreign investment flows.</div></div>","PeriodicalId":46094,"journal":{"name":"Research in Economics","volume":"80 1","pages":"Article 101114"},"PeriodicalIF":1.3000,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Research in Economics","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1090944326000049","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2026/1/11 0:00:00","PubModel":"Epub","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}

引用次数: 0

Abstract

This article analyzes the impact of carbon emission trading policies on China's role in global resource allocation, with an emphasis on two-way foreign direct investment (FDI). The analysis used a difference-in-differences (DID) methodology to assess the effects of carbon emission trading on outward foreign direct investment (OFDI) and inward foreign direct investment (IFDI), utilizing panel data from 28 provinces spanning 2006 to 2020. The results indicate a fundamental reorientation of investment patterns, revealing that carbon trading significantly enhances OFDI while limiting IFDI. Regional variability is evident: increased OFDI benefits central provinces, while diminished IFDI and elevated compliance costs result in reduced investment in the western region. Upgrading promotes the increase of OFDI, whereas rationalization diminishes IFDI inflows, illustrating the moderating effect of industrial structure. These results indicate that the carbon price serves several functions, including environmental regulation, facilitating economic transformation, and wealth transfer. The study's findings can assist policymakers in China and beyond in aligning environmental objectives with economic competitiveness by offering new empirical data linking carbon markets to foreign investment flows.

查看原文本刊更多论文

碳排放交易与全球资源配置：来自中国双向FDI的证据

本文分析了碳排放交易政策对中国在全球资源配置中的作用的影响，重点分析了双向对外直接投资（FDI）。利用2006年至2020年28个省份的面板数据，采用差异中差异（DID）方法评估了碳排放交易对对外直接投资（OFDI）和对内直接投资（IFDI）的影响。研究结果表明，碳交易在限制对外直接投资的同时显著提高了对外直接投资。区域差异是明显的：增加的对外直接投资有利于中部省份，而减少的对外直接投资和增加的合规成本导致西部地区投资减少。产业升级促进了对外直接投资的增加，而合理化则减少了对外直接投资的流入，说明了产业结构的调节作用。研究结果表明，碳价具有环境调控、促进经济转型和财富转移等多重功能。该研究的发现可以通过提供将碳市场与外国投资流动联系起来的新的实证数据，帮助中国及其他国家的政策制定者将环境目标与经济竞争力结合起来。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Research in Economics ECONOMICS-

CiteScore

1.40

自引率

0.00%

发文量

审稿时长

89 days

期刊介绍： Established in 1947, Research in Economics is one of the oldest general-interest economics journals in the world and the main one among those based in Italy. The purpose of the journal is to select original theoretical and empirical articles that will have high impact on the debate in the social sciences; since 1947, it has published important research contributions on a wide range of topics. A summary of our editorial policy is this: the editors make a preliminary assessment of whether the results of a paper, if correct, are worth publishing. If so one of the associate editors reviews the paper: from the reviewer we expect to learn if the paper is understandable and coherent and - within reasonable bounds - the results are correct. We believe that long lags in publication and multiple demands for revision simply slow scientific progress. Our goal is to provide you a definitive answer within one month of submission. We give the editors one week to judge the overall contribution and if acceptable send your paper to an associate editor. We expect the associate editor to provide a more detailed evaluation within three weeks so that the editors can make a final decision before the month expires. In the (rare) case of a revision we allow four months and in the case of conditional acceptance we allow two months to submit the final version. In both cases we expect a cover letter explaining how you met the requirements. For conditional acceptance the editors will verify that the requirements were met. In the case of revision the original associate editor will do so. If the revision cannot be at least conditionally accepted it is rejected: there is no second revision.