The Carbon Emissions Effect of China’s OFDI on Countries along the “Belt and Road”

Round 1

Reviewer 1 Report

The manuscript titled “Research on the carbon emission effect of China OFDI on countries along the "Belt and Road”. Here are my minor suggestions which can improve the manuscript.

 ·         The author(s) in the abstract used OFDI,  PIAV, and COFDI abbreviations, but readers don’t know the meanings of the abbreviations. The authors should check the whole text to fix these issues.

 ·         The introduction part is required to add a few more sentences to increase the strength of this article kindly bring in the research problem, objective, and novelty and explain it.

 ·         In equation (1) the authors should explain the meaning of the parameters

 ·         The authors should check the unit-roots of the variables before running regressions. Therefore, the authors should move Table 8 to the beginning of the Results and Discussion section

 

·         The authors used the GDP variable in some tables while LnGDP in others. This issue must be fixed. If the variable is LnGDP, the authors must use LnGDP in the whole tables and estimated models.

 

 

Author Response

Dear reviewer, thank you very much for your valuable comments and suggestions. According to your proposal, we have made a substantial revision of the paper from several aspects, such as abstract, introduction, methodology, results and discussion, so as to get your approval.

Point 1: The author(s) in the abstract used OFDI,  PIAV, and COFDI abbreviations, but readers don’t know the meanings of the abbreviations. The authors should check the whole text to fix these issues.

Response 1: Thank you very much for your advice. According to your suggestion, we have revised the abbreviations in the abstract. In addition, we checked the full text and explained the first place where abbreviations appear in the text. In line 237, as shown in Table 1, we explained the abbreviation of the full text. 

Point 2: The introduction part is required to add a few more sentences to increase the strength of this article kindly bring in the research problem, objective, and novelty and explain it.

Response 2: Thank you for your advice. According to your suggestion, we have improved the introduction from the aspects of research questions, objectives, and novelty. Please see Lines 50-115.

Point 3: In equation (1) the authors should explain the meaning of the parameters.

Response 3: Thank you for your advice. The parameters in equation (1) are explained in lines 270-277.

 

Point 4: The authors should check the unit-roots of the variables before running regressions. Therefore, the authors should move Table 8 to the beginning of the Results and Discussion section.

Response 4: Thank you very much for your advice. According to your suggestion, we have adjusted the unit root test. Move the unit root test to the front of the Results and Discussion section. Please see Lines 323-333.

Point 5: The authors used the GDP variable in some tables while LnGDP in others. This issue must be fixed. If the variable is LnGDP, the authors must use LnGDP in the whole tables and estimated models.

Response 5: Thank you very much for your advice. All variables in this paper are logarithmically treated. We checked and modified the full text.

Author Response File: Author Response.pdf

Reviewer 2 Report

 

The MS entitled “Research on the carbon emission effect of China OFDI on countries along the Belt and Road" by Ge et al. describes the impact of China's OFDI on carbon emissions in countries along the "Belt and Road" with reference to selected parameters like GDP.

 

General comments are as follows:

 

1.     A few lines of introduction to China’s Belt and Road initiative, what it entails, which countries are involved and how the activities may cause environmental concerns may be mentioned in the introduction for better appreciation of the objectives of the study

2.     Line 54 “Also, what are the differences in the carbon emission effects of China's OFDI among different countries?”) : The parameters considered (e.g. GDP) while ascribing the difference in carbon emission among the different countries may be mentioned

3.     Line 161: What is the nature of tertiary industries that might reduce carbon emissions in the present context may be mentioned

4.      The source of data on carbon emissions in the different countries may be clearly mentioned.

5.     Lines 261-262 “Considering the availability of data, we selected the panel data of 42 countries along  the "Belt and Road" from 2003 to 2020”: Was the Belt and Road initiatives started at the same time in all 42 countries? Was all the data from all the countries obtained during the period 2003- 2020? Was there any significant difference in the trend of carbon emissions between this period and the previous 10 years that could be ascribed to the initiation of the Belt and Road program? Although the authors mention that  “ We focus on testing whether China's OFDI has increased or reduced carbon emissions of countries along the route “ (line 230) details are not clear

6.     Lines 288-293 ‘The main reason OFDI in China has a carbon emission reduction effect is that state-owned enterprises are the main force. Compared with local enterprises in the "Belt and Road" countries, these enterprises have advantages such as larger scale, more advanced environment-friendly technology, and stricter environmental standards. (2) The   coefficient of GDP explanatory variable representing the scale effect of China's OFDI economy is significantly positive” : These parameters may be explained in greater detail. What is the nature of  “environment-friendly technology, and stricter environmental standards”, how do they differ among the countries under consideration ?

7.     The values used in calculations (e.g. GDP) should be mentioned in supplementary data

8.     The results given in the conclusions sections (lines 412-425) should mention corresponding Table/ Figures

9.     Grammatical mistakes throughout the MS should be corrected. E.g. Line 37:‘ Under the background’ should read ‘In the background…’

10.  Full form of abbreviations should be given when the term is first mentioned, e.g. EKC (line 151)

 

 

 

 

Author Response

Dear reviewer, thank you very much for your valuable comments and suggestions. According to your proposal, we have made a substantial revision of the paper from several aspects, such as introduction, influence mechanism analysis, data processing, results and discussion, so as to get your approval.

Point 1: A few lines of introduction to China’s Belt and Road initiative, what it entails, which countries are involved and how the activities may cause environmental concerns may be mentioned in the introduction for better appreciation of the objectives of the study.

Response 1: Thank you very much for your advice. We have improved the introduction according to your suggestions. We have added the contents of the "Belt and Road" initiative, the countries involved, and how these activities may cause environmental problems. Please see Lines 50-85.

Point 2: Line 54 “Also, what are the differences in the carbon emission effects of China's OFDI among different countries?”) : The parameters considered (e.g. GDP) while ascribing the difference in carbon emission among the different countries may be mentioned.

Response 2: Thank you very much for your advice. We take GDP, PIAV, and EI as threshold variables and use the threshold regression model to analyze the difference of carbon emissions between different countries. Please see Lines 94-103, 302-311, and 426-477.

Point 3: Line 161: What is the nature of tertiary industries that might reduce carbon emissions in the present context may be mentioned.

Response 3: Thank you very much for your advice. According to your suggestion, we have explained the nature of the tertiary industry that may reduce carbon emissions. Please see Lines 206-213.

Point 4: The source of data on carbon emissions in the different countries may be clearly mentioned.

Response 4: Thank you for your advice. According to your suggestion, we have supplemented the sources of carbon emission data in different countries. Please see lines 318-319.

Point 5: Lines 261-262 “Considering the availability of data, we selected the panel data of 42 countries along  the "Belt and Road" from 2003 to 2020”: Was the Belt and Road initiatives started at the same time in all 42 countries? Was all the data from all the countries obtained during the period 2003- 2020? Was there any significant difference in the trend of carbon emissions between this period and the previous 10 years that could be ascribed to the initiation of the Belt and Road program? Although the authors mention that  “ We focus on testing whether China's OFDI has increased or reduced carbon emissions of countries along the route “ (line 230) details are not clear.

Response 5: Thank you very much for your advice. Firstly, after the "Belt and Road" initiative was put forward, all countries continued to join the initiative. Therefore, the 42 countries selected in this paper did not join the Belt and Road Initiative simultaneously. Secondly, among the 42 countries selected in this paper, Tajikistan (2014) was the first to join the Belt and Road Initiative, and the Philippines (2018) was the latest. This paper mainly studies the carbon emission effect of China's OFDI on countries along the "Belt and Road". Although the "Belt and Road" was proposed in 2013, China's outward direct investment in the 42 countries selected in this paper has existed from 2003 to 2020. Therefore, the data of all countries in this paper are from 2003 to 2020. Finally, the purpose of this paper is to study the carbon emission effect of China's OFDI on the "Belt and Road" countries; because all countries have joined the Belt and Road Initiative continuously. Therefore, it is not allowed to take 2013 as the time limit to study whether the carbon emissions of 42 countries, in general, have increased rapidly due to the launch of the "Belt and Road" through comparative analysis before and after. In the next stage, we will select several countries with fast carbon emission growth from the "Belt and Road" countries. Specifically and separately analyze whether the carbon emissions of these listed countries have increased sharply due to their participation in the "Belt and Road".

Point 6: Lines 288-293 ‘The main reason OFDI in China has a carbon emission reduction effect is that state-owned enterprises are the main force. Compared with local enterprises in the "Belt and Road" countries, these enterprises have advantages such as larger scale, more advanced environment-friendly technology, and stricter environmental standards. (2) The   coefficient of GDP explanatory variable representing the scale effect of China's OFDI economy is significantly positive” : These parameters may be explained in greater detail. What is the nature of  “environment-friendly technology, and stricter environmental standards”, how do they differ among the countries under consideration ?

Response 6: Thank you very much for your advice. Firstly, according to your suggestion, we have explained the parameters in more detail. Please see lines 356-366. Secondly, the nature of environment-friendly technology refers to reducing carbon emissions per unit of energy while improving energy intensity. The nature of stricter environmental standards means that the government strictly requires enterprises to lower their carbon emissions per unit of energy than the specified standards. Finally, in terms of production technology, most countries along the "Belt and Road" are middle-income countries with low growth. Most countries with high levels of economic development have abundant energy reserves, and their overall production level is still relatively low. Therefore, compared with the "Belt and Road" countries, the production level of Chinese state-owned enterprises is relatively high. In terms of environmental standards, most countries in Central and Eastern Europe have strict requirements for ambient air quality standards; The ambient air quality standards in Central Asia and Southeast Asia are relatively loose; However, the severity of ambient air quality standards in South Asia, West Asia, and the Middle East varies greatly. Among them, Afghanistan, India, Pakistan, Iran, Kuwait, and other countries have stricter standards than China.

Point 7: The values used in calculations (e.g. GDP) should be mentioned in supplementary data.

Response 7: Thank you very much for your advice. We uploaded the data used in this article.

Point 8: The results given in the conclusions sections (lines 412-425) should mention corresponding Table/ Figures.

Response 8: Thank you very much for your advice. According to your suggestion, we have added descriptions to the tables/figures involved in the results in the conclusion section. Please see lines 479-494.

Point 9: Grammatical mistakes throughout the MS should be corrected. E.g. Line 37:‘ Under the background’ should read ‘In the background…’

Response 9: Thank you very much for your advice. We checked the manuscript and corrected the grammar errors.

Point 10: Full form of abbreviations should be given when the term is first mentioned, e.g. EKC (line 151)

Response 10: Thank you very much for your advice. We checked the manuscript and gave a complete form of abbreviations for the first-mentioned terms. Please see lines 195.

Author Response File: Author Response.pdf

Reviewer 3 Report

The paper is interesting, the topic of the paper is new and challenging, promising interesting openings, useful both for theory and practice. The topic of carbon emission effect of China OFDI on countries along the "Belt and Road” initiative is important and raises many ideas, often divergent.

The paper has merits, it is well organized, using a solid scientific and logical tool. Methodology and approaches are interesting, systematic and comprehensive.

However, I would have some considerations and suggestions for improving the quality of the article.

The Abstract is loaded with abbreviations (which are often confusing, because they are explained only later in the text), figures and methods of analysis, which are less attractive at this stage, when the aim should be to catch a reader’s interest. We recommend a partial reformulation of the Abstract to indicate the context and main motivations of the research, the objectives and results, in more general terms, and leaving details for the main body of the article.

The literature is quite limited in number, quality and diversity of articles and studies on this topic, and insufficiently systematized.

The main viewpoint is that some side-effects result from the mostly positive contributions of the Belt and Road initiative. Carbon emissions are described as the inevitable results, direct or indirect, of the overwhelmingly positive effects of OFDI – “expansion of production and economic scale will inevitably lead to an increase in the input of production factors”, or “economic scale growth, industrial scale adjustment, technological progress etc...”

Could the same effects have been achieved with lower carbon emissions? Is there an alternative model to the (controversial) EKC curve, according to which an economy does not need to achieve high income and performance before starting to reduce polluting emissions?

Are there (documented) negative or at least questionable ecological effects of OFDI?

It is an invitation to reflection that we suggest the authors to include in the final part of the discussion and analysis.

The proposed countermeasures and suggestions (see pages 12-13) are schematic and general (somewhat in the form of slogans), as long as they do not have quantifiable objectives or indicative terms (i.e. consensus, cooperation forums, development conferences, etc.).

Moreover, they are built on the same assumptions as we mentioned above, i.e. that of development that fuels and does not have to temper polluting emissions - see “China can increase the diversity of investment in the middle - and low-income countries…..China can appropriately encourage enterprises with advanced technology to invest in these countries”. At first glance, the option seems fair and encouraging, but how will this be achieved, what conditions are necessary, what alternatives do the countries involved have to ensure a sustainable economic growth?

 

Formal issues

In-text citations in the text must be corrected (e.g instead of exponent ^[1], insert [1])

The names of authors should be cited correctly in the text (start with a capital letter and without the initial of the first name) – e.g. Ahmad instead of Ahmad M; Sung instead of sung B; Feng L is Feng, Fujimori A is Fujimori.... and so on. Additionally, the names of cited authors are occasionally in bold (see above), without good reason.

Extraneous spaces between words.

Thank you for the opportunity to review this article and good luck!

Author Response

Dear reviewer, thank you very much for your valuable comments and suggestions. According to your proposal, we have made a substantial revision of the paper from several aspects, such as abstract, introduction, literature review, conclusions and suggestions, so as to get your approval.

Point 1: The Abstract is loaded with abbreviations (which are often confusing, because they are explained only later in the text), figures and methods of analysis, which are less attractive at this stage, when the aim should be to catch a reader’s interest. We recommend a partial reformulation of the Abstract to indicate the context and main motivations of the research, the objectives and results, in more general terms, and leaving details for the main body of the article.

Response 1: Thank you very much for your advice. According to your suggestion, we have improved the abstract. Please see Lines 13-45.

Point 2: The literature is quite limited in number, quality and diversity of articles and

Response 2: We agree with you very much. The literature on this subject is quite limited in the number, quality, and diversity of articles and studies on this topic and insufficiently systematized. Our team will carry out long-term research on this subject to form systematic research results. Thank you very much for your valuable suggestions and recognition.

Point 3: The main viewpoint is that some side-effects result from the mostly positive contributions of the Belt and Road initiative. Carbon emissions are described as the inevitable results, direct or indirect, of the overwhelmingly positive effects of OFDI – “expansion of production and economic scale will inevitably lead to an increase in the input of production factors”, or “economic scale growth, industrial scale adjustment, technological progress etc...” Could the same effects have been achieved with lower carbon emissions?

Response 3: The impact of international direct investment on the carbon emissions of host countries is mainly two opposite views. They are "pollution haven" hypothesis and "pollution halo" hypothesis. We believe that the impact of international direct investment on the carbon emissions of the host country mainly depends on the development level of the host country. Take the countries along the Belt and Road as an example. For countries with low development levels, China's foreign direct investment is often used to expand the generation scale. For countries with a high level of development, part of China's foreign direct investment will be used for scientific research and technological innovation.

Point 4: Is there an alternative model to the (controversial) EKC curve, according to which an economy does not need to achieve high income and performance before starting to reduce polluting emissions?

Response 4: Thank you very much for your advice. It may be that the statement in this article is incorrect, which leads to a misunderstanding. This paper agrees that, according to the EKC curve, the economy needs to achieve high income and high performance before starting to reduce pollution emissions. In lines 197-200, this article also shows that only when residents achieve high income can they pay attention to environmental problems, use clean energy in their lives, buy environment-friendly products, and hope that the government will adopt stricter environmental protection standards to improve environmental problems. Therefore, it is not necessary to replace the EKC curve in this paper.

Point 5: Are there (documented) negative or at least questionable ecological effects of OFDI?

Response 5: Thank you very much for your advice. According to our survey, many multinational enterprises have committed acts of destroying the ecological environment in the host country. They have not strictly complied with the ecological environment protection of the host country. For example, the wastewater treatment facilities of Shanghai Panasonic Battery Co., Ltd. (the parent company of Panasonic Electric Co., Ltd. in Japan) did not guarantee normal operation, resulting in excessive wastewater discharge. Changchun PepsiCo Co., Ltd. (parent company PepsiCo USA) discharges pollutants and wastewater exceeding the standard. The electroplating production line of the wholly-owned subsidiary of Yamaha Engine Co., Ltd. of Japan has significant environmental safety hazards.

Point 6: It is an invitation to reflection that we suggest the authors to include in the final part of the discussion and analysis. The proposed countermeasures and suggestions (see pages 12-13) are schematic and general (somewhat in the form of slogans), as long as they do not have quantifiable objectives or indicative terms (i.e. consensus, cooperation forums, development conferences, etc.). Moreover, they are built on the same assumptions as we mentioned above, i.e. that of development that fuels and does not have to temper polluting emissions - see “China can increase the diversity of investment in the middle - and low-income countries…..China can appropriately encourage enterprises with advanced technology to invest in these countries”. At first glance, the option seems fair and encouraging, but how will this be achieved, what conditions are necessary, what alternatives do the countries involved have to ensure a sustainable economic growth?

Response 6: Thank you very much for your advice. According to your suggestions, we have improved the countermeasures and suggestions in this paper. Look at lines 495-550.

Point 7: In-text citations in the text must be corrected (e.g instead of exponent ^[1], insert [1]).

Response 7: Thank you very much for your advice. According to your suggestion, we corrected all the citations in the text.

Point 8: The names of authors should be cited correctly in the text (start with a capital letter and without the initial of the first name) – e.g. Ahmad instead of Ahmad M; Sung instead of sung B; Feng Lis Feng, Fujimori A is Fujimori.... and so on. Additionally, the names of cited authors are occasionally in bold (see above), without good reason. Extraneous spaces between words.

Response 8: Thank you very much for your advice. According to your suggestion, we checked and revised the author's name in the article. Look at lines 117-178.

Author Response File: Author Response.pdf

Round 2

Reviewer 3 Report

The authors carefully and comprehensive addressed all the suggestions and observations made in our previous review. As a result, we consider the current form of the article suitable for publication.