The impact of coordinated development of two-way FDI on regional green technology innovation capability

Abstract

With the coordinated development of IFDI and OFDI (IOFDI) proposed as a link between the domestic and international dual cycles, IFDI helps the domestic cycle and widens its scope, while OFDI integrates into the external cycle and seeks depth, jointly promoting the high-quality transformation of China's economy. The nation and academics have long attentively monitored green technology innovation as a crucial pillar for the economy's superior growth. Thus, this study investigates how China's green innovation potential might be enhanced through the coordinated growth of two-way FDI. It examines the diversity of regions from a regional standpoint. The central and western regions have negative coefficients, but the eastern region has a positive one. This research examines the sequential changes in the impact of government quality thresholds on green technological innovation in the setting of coordinated development of two-way FDI, while also taking government quality into account as a threshold variable in the model.The findings indicate that government quality has a single threshold effect. At the same time, this study also makes pertinent recommendations to optimize the role of the government and encourage the coordinated growth of green technological innovation across regions.