Does outward foreign direct investments of emerging market firms enhance the “green” innovation capability of the home country?

Yi Wang, Chao Li

Research output: Working paperResearch


With an ever-increasing pressure from the government and environmental groups regarding sustainability, it is urgent and imperative for firms to develop eco-innovations and make them an integral part of overall business strategy. For example, the Sustainable Development Goals (SDGs) enacted by United Nations have urgently called for actions including scientific research to tackle various environmental issues such as climate change, air and water pollution, greenhouse gas emissions, and waste generation. These environmental pressures have become major policy issues especially in emerging and developing countries such as China due to its rapid industrial expansion. For example, the Chinese government has already taken important steps in strengthening environmental protection policies and legislation since China’s political and economic reforms initiated in 1978. Previous research have shown that foreign direct investments (FDIs) inflow to China increases the knowledge spillover effect, which in turn, benefits the innovation capability of local firms. However, we still know little about the role that outward FDIs by firms originating in emerging markets play on innovation capability of the home country. The purpose of the study is to address the impact of outward foreign direct investments by emerging markets multinational enterprises (EMNEs) on the “green” innovation capability of home markets. Data were drawn from various versions of China Statistical Yearbooks and other secondary databases and we are in the process of cleaning and analyzing the data. We aim to deliver the paper to top journals such as Research Policy or Journal of World Business for review in fall 2020.
Original languageEnglish
Publication statusIn preparation - 2020


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