ORIGINAL RESEARCH
FDI Inflows, Market Fragmentation and Their
Impact on Industrial Environmental Efficiency:
An Empirical Study in China
| 1 | School of Economics and Management, Fuzhou University, Fuzhou, China |
CORRESPONDING AUTHOR
Submission date: 2019-06-04
Final revision date: 2019-08-20
Acceptance date: 2019-08-26
Online publication date: 2020-02-26
Publication date: 2020-04-21
Pol. J. Environ. Stud. 2020;29(4):2969–2980
KEYWORDS
TOPICS
Policies for economically sustainable developmentPolicies for socially sustainable developmentPolicies for environmentally sustainable development
ABSTRACT
Sustainable development of industry, especially in developing countries, is an effective way to
solve the conflict between industrial economic growth and the ecological environment. Industrial
environmental efficiency is selected to measure the sustainable development of industry. We used
the super-SBM method to evaluate the industrial environmental efficiency of 29 provinces during the
period of 2007-2015. Our study analyzes the effect of FDI and market fragmentation on industrial
environmental efficiency based on the system GMM approach. The result indicates that the impact
of FDI on industrial environmental efficiency is significantly negative, which suggests that FDI
significantly hinders industrial environmental efficiency. Market fragmentation significantly inhibits
industrial environmental efficiency. We also further investigate the effect of the interaction between
FDI and market fragmentation on industrial environmental efficiency. The result indicates that the
negative effect of FDI on industrial environmental efficiency is stronger in provinces with more severe
market fragmentation. Based on the findings, the government should promot
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