Can two-way Foreign Direct Investment promote green technology spillover in Belt and Road countries? An analysis based on the moderator variable of the technology gap

The rapid growth of two-way foreign direct investment (FDI) is a striking feature of the Belt and Road (B&R). Can two-way FDI promote green technology spillover (GTS) from the B&R countries? Does the technology gap moderate GTS? And what is the underlying mechanism? To this end, this paper systematically analyses the impact of two-way FDI on GTS based on panel data of 64 B&R countries from 2001 to 2020. Three significant findings were obtained: first, there is a dynamic effect between two-way FDI and GTS, and the technology gap always adjusts this relationship positively. Second, "Iron needs to be hard." Whether "going out" or "coming in," GTS is confined to a certain extent. The B&R countries must rely on their capabilities to build higher-quality, independently controllable key technology chains. Finally, the technology effect of two-way FDI always inhibits GTS, and the technology gap between the B&R countries and technology frontier countries is the "valley of death" which is difficult to cross but has to cross. These findings have targeted policy implications for the B&R countries to capture better GTS.