How Does Foreign Direct Investment Impact the Sustainable Development? Empirical Evidence from China’s Coastal Areas

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

A brief summary. The paper examines the impact of foreign direct investment on sustainable development in coastal areas in China. Taking into account that the concept of sustainable development focuses on the economic development, social development and environmental protection for future generations, it looks as if the paper fits the journal scope, which provides an advanced forum for studies related to sustainability and sustainable development.

General concept comments. As the first drawback of the work, I would note the choice of variables. As an explained variable authors use the urban sustainable competitiveness index, which is  the integral index (according to the paper, the urban sustainable competitiveness index is based on five dimensions, namely economic vitality, environmental resilience, social inclusion, science and technology innovation, and global connectivity, and 28  secondary indicators are collected and calculated using a non-linear weighted composite method).  At the same time, given the many objective limitations of applying integral indices and the fact that their quality and accuracy crucially depend both on the completeness of available data and on methodological approaches to their compilation, I agree “ideal integral indices are the exception rather than the rule”. As a result, estimates of such models cannot be trusted.

Then talking about control variables it should be noted that authors do not pay any attention to the difference between traded and non-traded sectors of economies choosing the parameter "Industrial output". In detail, mining and manufacturing are among the traded sectors, and electricity, gas and water production and supply are among the non-traded sectors (for example, check out the well-known industry classification here: Mano, Rui C. and Marola A. Castillo. “The Level of Productivity in Traded and Non-Traded Sectors for a Large Panel of Countries.” International Monetary Fund (IMF) Research Paper Series (2015). This omission most likely shifted the estimates of the model. In addition, the description of the variable "Industrial output" (Table 1) does not explain the measurement. Particularly, what does "above a certain scale" mean?

The second negative aspect of the paper is the structure of the manuscript, which is not presented in a well manner. For example, it is not entirely clear why in section 4 " Empirical results" the authors pay so much attention to the methodological and theoretical aspects of the study. In particular, several paragraphs of the "results" are devoted to explaining the meaning of VIF, the simplest coefficient. Despite the detailed description of the theory (VIF is used to investigate the presence of a linear relationship (multicollinearity) between independent variables), it looks as if the authors incorrectly apply the tool VIF: in the lines 272-273 it is said that "the sustainable urban competitiveness index combines economic, environmental and social aspects and is likely to have ripe multicollinearity with the control variables". But in the paper the sustainable urban competitiveness index is a dependent variable and as it was properly mentioned it "combines economic, environmental and social aspects and is likely to have ripe multicollinearity with the control variables" which actually creates the problem of endogeneity and leads to biased estimates. Therefore, it is desirable to detail this aspect for the absence of endogeneity.

I would also recommend paying more attention to the part “Data” by separating it into distinct section. The following important information is not indicated in the work: whether statistical data on the indicators in table 1 were normalized (if so, in what way?).

Thirdly, the hypotheses formulated in the article are very broad. In my opinion, their verification, which requires various research methods, makes it very difficult to perceive the article as a complete work. For example, hypothesis 3 could be definitely investigated in a separate scientific manuscript. As presented now, the article is very difficult to read.

Although the literature review and collected data are interesting, I recommend a major revision of the paper.

Specific comments. 

1.      I would not recommend using an abbreviation in the title of the article (FDI);

2.      I recommend removing from abstract the word "first" in the sentence "This analysis first explores the linear impact of FDI on 9 sustainable development in coastal areas with 53 cities in China from 2012 to 2020".

3.      The recommendations in section 6.2. are too general. In my opinion, it was not necessary to make such detailed calculations to recommend the following (lines 607-609, 613-614): “local governments should formulate reasonable industrial policies according to their own resource endowments, and actively guide the development of low-energy consumption, environmental protection, and high-technology industries” / “to encourage the government to increase financial expenditure on science and technology and upgrade the level of scientific and technological innovation in coastal areas”.

4.      I recommend giving the article to a professional translator for proofreading.

Author Response

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Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

The abstract effectively summarizes the study conducted. You have stated your aim in the introduction. My opinion is that the aim is too broad. Please specify more concretely about the aim and in which area of sustainability you are looking. The second section title should be written in capital letters. The model is well explained. Still, I am not aware of how the sustainable development variable is measured and what it represents. You explained it in 3.2.1, but still not aware whether it is a composite aggregated indicator provided by the mentioned report from the urban sustainable competitiveness index. Please clarify its meaning. The results as shown per the proposed methodology are very comprehensive. Your paper is providing and adequate discussion followed by very precise conclusions and recommendations. 

Comments on the Quality of English Language

The second section title should be written in capital letters. 

Author Response

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Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

As evaluating the paper "Sustainability 2023" on the impact of FDI on sustainable development in coastal areas, here are some strong points and weak areas that may need revision.

For strong points, the paper makes an original contribution by analyzing the non-linear impact of FDI under different industrial structures and technological conditions, providing valuable insights for attracting and improving the quality of FDI in coastal regions. The paper demonstrates a thorough understanding of existing literature on FDI and sustainable development, citing relevant studies to support the research findings. The paper shows methodological rigor by using appropriate statistical analyses to examine the relationship between FDI, industrial structure, and sustainable development indicators. The paper offers clear recommendations for policymakers, such as developing the tertiary industry, strengthening infrastructure, and regulating FDI in specific industries to promote sustainable development.

However, there are areas for revision.

1.     Clarity and Structure: The paper could benefit from improved clarity and structure in presenting the research findings and methodology. Ensuring a logical flow of information can enhance the readability and understanding of the study.

2.     Further Analysis: The paper acknowledges the need for further analysis on specific dimensions of sustainable development and suggests incorporating additional variables to better reflect industrial structure and technological innovation. Conducting this analysis can strengthen the research findings.

3.     Limitations and Future Research: It would be beneficial to explicitly discuss the limitations of the study, such as potential biases or constraints, and propose avenues for future research to address these limitations and expand on the findings.

In the end, the paper shows promise in contributing to the understanding of FDI's impact on sustainable development in coastal areas. Addressing the suggested areas for revision can enhance the quality and impact of the research.

Comments on the Quality of English Language

I am not qualified to assess the quality of English in this paper

Author Response

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Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

Despite the corrections, that have been made, I must emphasize that most of the general concept comments have not been corrected.

1. My remark concerning the required separation of traded sectors of economies from non-traded has not been corrected. Authors gives explanation about the official name of the used indicator ("the number of industrial enterprises above designated size") and what it means (according to the interpretation of this variable by the National Bureau of Statistics, industrial enterprises above scale refer to industrial legal entities in the mining, manufacturing, and electricity, gas and water production and supply industries with an annual main business income of 20 million yuan or more.). But still their omission shifts the estimates of the model, and as a result, we cannot trust them.

2. I recommended paying more attention to the part “Data” by separating it into distinct section and normalizing statistical data. I argue that logarithm of non-normalized data (as authors have done) does not solve the problem of biased estimates. Moreover, authors added table 2 for descriptive statistics of the logarithm data, which does not make sense.

3. As corrections of the comment regarding hypothesis 3 authors just replace the content of hypothesis 3 to another part of the paper, considering that the remark is self-removed. It does not work that way. At least, the title of this part (4.5. “Further discussion: heterogeneity test based on different city types”) does not correspond to the content which is devoted to results. 

I recommend a major revision of the paper.

 

Author Response

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Author Response File: Author Response.pdf

Round 3

Reviewer 1 Report

Comments and Suggestions for Authors

Accept in present form