An asymmetric nexus between clean energy, good governance, education and inward FDI in China: Do environment and technology matter? Evidence for chines provincial data

Abstract

The inflows of FDI has revealed a catalyst effect on economic progress with sustainability. Furthermore, continual inflows of FDI prompts. The motivation of the study is to evaluate the effects of energy, good governance, education, and environmental regulation on inflows of FDI in china for the period 1997–2018. A panel data econometrical technique has been implemented, including panel unit root, cointegration, CS-ARDL, and asymmetric ARDL. Moreover, the directional causality has been investigated by employing the H-D causality test. According to the coefficients for CS-ARDL, the study documented a positive statistically significant linkage between explanatory variables, i.e., good governance, education, and energy, and explained variables, especially in the long run, whereas environmental regulation established an adverse association with FDI inflows in China. In terms of the standard Wald test, the study confirms the asymmetric linkage between explanatory variables and FDI in the long-run and short-run estimation. Referring to the asymmetric coefficients of good governance, education, and energy revealed a positive tie with inflows of FDI, while a negative statistically significant connection was disclosed between environmental regulation and inflows of FDI. Furthermore, directional casualty test established asymmetric shocks in CE [FDI←→ ${CE}^{+};\mathrm{F}\mathrm{D}\mathrm{I}\leftarrow \to {CE}^{-}]\text{,}$ negative shocks in education [ ${EDU}^{-}$ ←→FDI]. Based on study findings policy suggestions has derived for future development