Journal of Cleaner Production 387 (2023) 135914

Contents lists available at ScienceDirect

Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Does foreign direct investment promote environmental performance: An

investigation on shadow prices of pollutants
Ziming Yue a, Lingyu Meng a, Yunguo Mu a, Tomas Baležentis b, Zhiyang Shen a, *
a
School of Management and Economics, Beijing Institute of Technology, 100081, Beijing, China
b
Lithuanian Centre for Social Sciences, Vilnius, Lithuania

A R T I C L E I N F O A B S T R A C T

Handling Editor: Panos Seferlis The shadow prices, or marginal abatement cost, of pollutants is a useful measure of environmental performance.
Unlike much of the previous studies focusing on only one kind of pollutants, this paper applies the (multiplier)
JEL classification: by-production approach to measure the shadow prices of carbon emission, sulfur emission, and dust. The case of
O10 regional economies in China is considered. As the foreign direct investment may have an impact on the envi­
F18
ronmental performance, a spatial Durbin model is utilized to identify the impact of foreign direct investment on
Keywords: the shadow prices of pollutants. The results show that the shadow prices of all three pollutants have been
Shadow pricing
increasing over time which indicates the environmental performance of China has been improving. Moreover,
By-production
the spatial regression results imply that both foreign direct investment and technology export volume positively
Foreign direct investment
Dual formulation impact the shadow price of pollutant emissions across the provinces of China.

1. Introduction
Economic growth and environmental pressures are often related in a
direct relationship. Especially, the economies with rapid growth rates
face the greatest challenges in decoupling the economic growth and
environmental degradation. The case of China rewards particular
attention to identify the major solutions for alleviating the environ­
mental impacts while securing economic growth and development. The
World Health Organization (WHO) estimates that the number of people
who died from air pollution-related diseases each year is approximately
2.4 million (Li et al., 2019). The number of days with fine particulate
matter (PM2.5) as the main pollutant is about 60.0% of the severely
polluted days in China. It is thus clear that pollution has become an
urgent and health-impacting problem in China that is attracting
increasing attention. In 2002, China entered a period of heavy indus­
trialization, which led to a gradual increase in environmental pollution.
Chinese government adopted sustainable development as a funda­
mental national development strategy in the late 20th century. In the
context of building an environment-friendly society in an all-round way,
how to improve environmental quality and reduce the cost of pollutant
emission reduction has become an important link restricting China’s
development. The 2020 Global Environmental Performance Index (EPI)
Report shows that among the 180 countries and regions participating in
the evaluation, China ranks 120th with a score of 37.3. Therefore, it is of
great significance to ascertain whether environmental protection is
compatible with economic development.
There have been studies dealing with the issues of high importance in
the environmental dimension and tackling them along with economic
objectives. For example, the conceptual framework of sociotechnical-
systems for guiding environmental policy was established by taking
into account the demographic characteristics of households (Ozarisoy
and Altan, 2021). In the case of China, such pollutants as carbon oxides,
sulfides oxides, and dust are important when assessing the environ­
mental performance (Song et al., 2017). The literature shows that
different environmental regulations have an impact on China’s air
pollution control, and there has been positive correlation between
environmental governance of air pollution and the air pollution’s con­
trol efficiency, which is restricted by the degree of regulation strictness.
In addition, different environmental regulations methods used in the
same city will lead to different governance effects. Attempts to improve
the control efficiency of air pollution through informal regulation are
likely to be ineffective. Therefore, Wu and Gao (2021) find that to truly
improve the environment, the government should set a reasonable level
of regulatory strictness. Based on this current situation, China has also

* Corresponding author.
E-mail addresses: yuezm0511@163.com (Z. Yue), 3122795931@qq.com (L. Meng), yunguomu@163.com (Y. Mu), tomas.balezentis@ekvi.lt (T. Baležentis),
zhiyang86@163.com (Z. Shen).

https://doi.org/10.1016/j.jclepro.2023.135914
Received 6 May 2022; Received in revised form 3 December 2022; Accepted 4 January 2023
Available online 4 January 2023
0959-6526/© 2023 Elsevier Ltd. All rights reserved.
Z. Yue et al.
introduced a set of environmental protection policies and posed some
measures to improve the environment.
When evaluating the level of pollution control, the shadow price of
undesirable output indicates the economic benefits given up achieving
emission reduction (He, 2021; Li et al., 2020). The shadow price
approach has been followed to produce a comparable criterion for
measuring the rigor of climate policies. This measure can be applied at
any level of aggregation. For instance, the relationship between carbon
dioxide (CO2) emission intensity and energy-intensive industries of the
pollution haven effect can be assessed (Hille, 2018). In the past, studies
about the shadow price of pollutants almost all concentrated on carbon
dioxide emission. The literature has focused on various pollutants and
industries. Research on the shadow price of pollutants may focus on the
whole economy, primary, secondary or tertiary sectors. The micro-level
analysis is also possible within any sector. Likewise, different models can
be applied to calculate or estimate the shadow prices of such pollutants
(or unintended outputs in general) as nitrogen, phosphorus, suspended
solids and chemical oxygen demand (Molinos-Senante et al., 2015;
Molinos-Senante and Guzmán, 2018), pollution related to electric power
industry (Murty et al., 2007; Vardanyan and Noh, 2006; Lee and Zhou,
2015) and leather industry (Singh and Gundimeda, 2021). Besides the
carbon dioxide emissions, China also has seen environmental problems
related to sulfur dioxide (SO2) emissions and dust. In addition to the
shadow price of carbon dioxide emissions, the shadow price of carbon,
sulfur, and dust are creatively computed this study, filling some gaps in
this field. The paper aims to use the by-production (BP) method (Murty
et al., 2012) to calculate the shadow prices of carbon oxides, sulfur, and
dust in 30 cities in China and to explore the factors that influence the
shadow prices of these pollutants. This paper focuses on the impact of
foreign direct investment (FDI) on the shadow price of pollutants and
then explores the impact on air pollution control. This paper then pro­
vides information for local governments to set relevant emission
reduction policies and for enterprises, they can improve their emission
systems and develop carbon reduction strategies.
The purpose of the present study is to apply the by-production
approach and calculate the shadow prices of carbon, sulfur, and dust
emissions. This information is then used to address the secondary
objective - to explore the relationship between the shadow prices and
foreign direct investment. Finally, we seek to draw policy recommen­
dations based on the empirical results.
In past studies, the relationship between FDI and pollution has been
studied. But is there a correlation between FDI and the shadow price of
pollutants? In order to:1) make shadow price research cover more
comprehensive objects; 2) Policy formulation is more targeted for
different pollutants and different regions; 3) Further study the impact of
foreign direct investment on provincial environment from the perspec­
tive of pollutant shadow price. The purpose of this paper is to use the by-
production method to calculate the shadow prices of carbon, sulfur, dust
and other pollution, and to explore the relationship between the shadow
prices and foreign direct investment, and finally to draw policy
recommendations.
This study uses a relatively novel BP model to calculate the shadow
prices of pollutants in China’s economy. What is more, spatial regression
is used as a state-of-the-art approach to investigate the relationship
between FDI and shadow prices. The results add to the discussion in the
area of shadow prices and the impacts of the FDI on environmental
performance.
The remainder of this paper is structured as follows: Section 2 con­
tains a literature review of the research on shadow prices and the related
methods. Section 3 proceeds with description of the by-production
model and its use to compute the shadow prices of the three pollutant
emissions in 30 provinces of China. Section 4 presents the results of the
shadow price calculation and spatial regression. Finally, Section 5 pro­
vides policy recommendations.
2
Journal of Cleaner Production 387 (2023) 135914
2. Literature review
Such compounds as carbon dioxide, sulfur dioxide, and dust like
PM2.5 can harm human health directly or indirectly. Carbon dioxide
emissions has accelerated global warming (Cui et al., 2022), which, in
turn, may affect residential buildings causing risk of overheating
(Ozarisoy, 2022) among other undesirable outcomes. PM2.5 is exposed
to the air for a long time and is difficult to eliminate, which leads to
environmental pollution problems and can greatly affect people’s health
(Wang et al., 2022). Blood pressure and PM2.5 exposure were found a
significant relationship between them (Oh et al., 2022). Persons exposed
to air pollution for a long time will have a significantly increased risk of
respiratory disease which will affect lung function (Kamaruddin et al.,
2014).
Measuring the effectiveness of the pollution control and delivering
guidelines for further reduction in pollution are crucial for under­
standing of the functioning of the environmental policies. It is important
to relate multiple sectors and the resulting pollution activities to develop
effective policy measures and ensure sustainable development (Naba­
vi-Pelesaraei et al., 2017, 2022). The shadow price is an effective indi­
cator to measure the environmental performance level and pollution
control effectiveness of a region, sector, economy or individual entity.
The research methods on the shadow price of pollutants are mainly
divided into two directions: Pittman (1981) estimated the shadow price
by using the Shephard distance function (Wang and Su, 2013). The latter
study represents the parametric approach. The other way is to calculate
the shadow price of pollutant emissions based on the non-parametric
approach towards representing the productive technology.
2.1. Parametric method
The parametric approach was applied in the early studies on pollu­
tion abatement costs as well as in the recent ones. The production model
is adopted that allows inputs and outputs to be substituted, thereby
determining the abatement cost of pollutants or undesirable outputs in
general (Rodseth, 2013). The different regions and sectors have been
covered.
As regards China, the earlier research has found that the shadow
prices of the unintended outputs related to the climate change or
pollution have been increasing in recent years (Xie et al., 2015). The CO2
emission marginal abatement cost (MAC) was also calculated using
meta-frontier analysis and directional distance function in Chinese
coal-fired power plants (Du et al., 2016). In the latter case, the
state-owned power plants and the private ones had separate
sub-technologies. The results confirmed the possibilities for substantial
reduction in the CO2 emission (Du et al., 2016) that could improve the
environmental quality. Zhou et al. (2015) estimated CO2 emission
shadow price of the industrial sector in Shanghai using a
multi-directional distances. Choi et al. (2012) found regional imbalance
of CO2 emission reduction in China.
The parametric methods that rely on the deterministic or stochastic
approach also require choosing the direction to which the projection
onto the production frontier is made (Wang et al., 2018). The choice of
the direction may be arbitrary or related to policy priorities. Some
studies also attempt to apply different directional vectors to check the
robustness of the results. The shadow price of PM2.5 was calculated by
using the non-radial parametric directional distance model and the
environmental efficiency and MAC of PM2.5 was calculated using panel
data for 2004–2016 on cities in China (Cheng et al., 2019). The spatial
correlation and spatial variation were both present. This suggests that
Chinese regions are interrelated and clustered into several groups.
Accordingly, recommendations for different policies in different regions
should be adopted to ensure meaningful and effective directives are
offered.
The other types of the unintended outputs can also be modelled.
Maziotis et al. (2020) regarded the unintended water supply
Z. Yue et al. Journal of Cleaner Production 387 (2023) 135914

interruption of Chilean water supply companies as a kind of pollution. 3. Methods

They used the data from 2007 to 2017 on 21 Chilean water companies to
calculate the shadow price of unexpected water supply interruptions
based on the input distance function. Zhou et al. (2014) compared
parametric and nonparametric efficiency analysis models when
obtaining inefficiency and shadow prices.
2.2. Nonparametric method
This section first introduces the BP technology and the DEA model
used for gauging the carbon shadow price (CSP), sulfur shadow price
(SSP), and dust shadow price (DSP). Then, we discuss the second stage
spatial regression that will be used assessing the factors of the afore­
mentioned shadow prices. For sake of comparison, different estimators
are applied.

The advantage of the nonparametric method is that a prespecified 3.1. By-production technology and undesirable outputs
functional form is not needed. The original nonparametric method is the
data envelopment analysis (DEA) method presented by Charnes et al. The BP method divides the output set into two parts: one comprises
(1978). The most basic DEA optimizes the production process by the desirable outputs denoted by y and another comprises undesirable
adjusting the inputs or outputs in the same proportion. Many studies outputs denoted by z. Similarly, the input set can be divided into two
aimed at developing new DEA models, such as the slack-based DEA parts: clean input set denoted by xn (the inputs in this sub-set do not
proposed by Tone (2001). Using the directional distance function produce undesirable outputs) and dirty input set denoted by xp (these
method, Liu et al. (2011) found that shadow prices are higher in areas inputs produce undesirable outputs). Therefore, the BP method defines
with lower carbon dioxide emission intensity, which means that with the two sub-technologies: The first sub-technology T1 refers to the process of
implementation of energy conservation and emission reduction policies converting both clean inputs and dirty inputs into desirable outputs. The
further difficulty emission reduction is more complex in China. second sub-technology T2 refers to the process of converting dirty inputs
The economic and environmental objectives may be represented by into undesirable outputs. BP technology (TBP) is the combination of T1
adjusting the objective function in the linear programming problem. As and T2. Therefore, BP technology is defined as (Murty et al., 2012):
for the DEA, income maximization and the pollution abatement cost { }
minimization may be assumed. Yu et al. (2019) suggested that govern­ TBP = T1 ∩T2 = (xn ,xp ,y,z) ∈ RN+P+M+J : (xn ,xp )canproduce y;xp can generatez
{ n p ⃒ n +p }
ment should come up with a tool that can assess national allocation of
N+P+M ⃒
T1 = (x ,x ,y) ∈ R+ f (x ,x ,y) ≤ 0
{ ⃒ }
mitigation commitments and set targets for individual decision-making T2 = (xp ,z) ∈ RP+J ⃒g(xp ) ≤ z
+
units in the region. Shen et al. (2021a,b) used a nonparametric (1)
meta-frontier approach that differs from the traditional technology gap
approach to assess the role of carbon dioxide emissions from different where N, P, M, J represent the cardinalities of the subsets of many clean
perspectives. inputs, dirty inputs, desirable outputs, and undesirable outputs. Func­
Thus, the conventional shadow pricing methods may yield biased tions f () and g (.) represent continuously differentiable functions. BP
economic interpretations in case the model is not formulated according technology distinguishes desirable output from undesirable output by
to the economic principles and axioms. Recently, the environmental imposing different assumptions of disposability. Sub-technology T1,
production technology was refined by dividing inputs into two cate­ which produces the desirable output, assumes the free disposability of
gories, namely, inputs that do and do not produce undesirable outputs. the desirable output; that is, excessive resources can be used to have the
The latter approach is referred to as by-production method. The by- same output, that is, inefficient production is allowed. Sub-technology
production method (Murty et al., 2012) can be facilitated in a T2, which produces undesirable output, assumes costly disposability;
nonparametric way of calculating pollutants’ shadow prices (parametric that is, if the use of polluting inputs is not reduced, then the undesirable
way was discussed by Tsagris and Tzouvelekas, 2022). The description output will not be reduced.
of the pollution-generating technology rests on the principle that dirty
inputs (as opposed to the clean ones) are responsible for the undesirable 3.2. Data envelopment analysis for the by-production model
output generation and thus link the underlying sub-technologies. In the
BP method, sub-technology for pollution generation follows the costly The directional distance function can be used to represent the BP
disposability assumption. It also important to ensure that the shadow technology. The environmental performance gap (inefficiency) is the
prices are non-negative, i.e., they are meaningful in the economic sense. value of the distance function for a given observation. The required
Noteworthy, the by-production approach rests on the materials balance adjustments in the desirable and undesirable output quantities are used
principle. as the basis for calculating the value of the directional distance function
The earlier literature has not reported the shadow prices of unde­ in the fashion of Färe-Grosskopf-Lovell (FGL):
sirable outputs associated with the industrial production in China when ⎧
multiple undesirables are included in a by-production model along with ∑J
⎪
⎪ ∑
M
⎪ δm
⎨ θj
second stage analysis relying on the spatial regression. Whereas different ( ) 1 m=1 j=1
D x, y, z; gx , gy , gz = max + ∈ R+
facets of this problem have been addressed, the complete analysis (in the 2 δ,θ ⎪
⎪ M J
⎪
⎩
sense as described above) has been missing. What is more, there is a need
for including foreign direct investment as a determinant of the shadow ⎫
⎪
⎪
price while allowing for spatial correlation. This study addresses the ( )
⎪
⎬
aforementioned gaps in the literature. The by-production model is : x, y + δ ⊗ gy , z − θ ⊗ gz ∈ T (2)
⎪
⎪
applied for province-level data covering the timespan from 1997 to 2019 ⎪
⎭
and 30 provinces in Chin a and calculating the shadow prices of the three
pollutant emissions of carbon, sulfur, and smoke in 30 provinces in As one can see from Eq. (2), the adjustments in the desirable and
China. In addition, provincial panel data from 30 provinces will be used undesirable outputs are implemented by using directional distance
to study the factors affecting the shadow price of provincial pollutant vectors gy and gz, respectively. The element-by-element multiplication is
emissions, draw conclusions, and put forward corresponding policy applied. When δ = 0 and θ = 0, full efficiency is achieved.
recommendations. The BP model was initially proposed by Murty et al. (2012). How­
ever, the basic BP model does not consider the connection between the
two sub-technologies in the sense of the optimal input use (Dakpo and
Lansink, 2018). Later on, Balězentis et al. (2021) revised the

3
Z. Yue et al. Journal of Cleaner Production 387 (2023) 135914

by-production model to ensure the linkage. This paper uses the model by
ωDust
Balězentis et al. (2021). The latter model considers two sub-­ DSP = z
(5)
πGDP
technologies: y

( )
( ) ∑
N ∑
P ∑
M ∑
J
D x, y, z; 0, gy , gz = min
p p
πnx xnk′ + πpx xpk′ − πmy ymk′ − v1 + ωjz zjk′ + v2
πy ,π nx ,πx ,ωx ,ωz ,v1 ,v2 n=1 p=1 m=1 j=1
( )
∑
M ∑
N ∑
P ∑
P
s.t. πmy ymk − πnx xnk − πpx xkp + ωpx xkp + v1 ≤ 0, ∀k
m=1 n=1 p=1 p=1

∑
P ∑
J
ωpx xpk − ωjz zjk − v2 ≤ 0, ∀k
p=1 j=1
/ (LP1)
πmy gmy ≥ 0.5 M, ∀m
/
πjz gjz ≥ 0.5 J, ∀j
πmy ≥ 0, ∀m
πnx ≥ 0, ∀n
πpx ≥ 0, ∀p
ωjz ≥ 0, ∀j

The obtained shadow prices of pollutants may suggest certain di­

where sub-technologies T1 and T2 in this BP model are associated with rection for the decision-makers when formulating environmental pro­
corresponding shadow prices, namely, π and ω. More specifically, πnx , πpx , tection strategies. The higher the shadow price is, the more expensive it
and πy are the shadow values of clean inputs, pollution-generating is to abate pollution; therefore, a certain province will be more difficult
inputed, and desirable outputs in sub-technology T1; ωpx and ωz are the to reduce the pollution if the abatement cost is rather high. Conversely,
shadow values of dirty inputs and undesirable outputs in the pollution the lower the shadow price is, the level of pollution is higher and curbing
generation sub-technology T2. Allowing for variable returns to scale pollution is relatively cheaper. Thus, an increasing shadow price implies
implies that equations related to sub-technology T1 are augmented with increasing environmental performance.
variable v1 and sub-technology T2 is augmented with v2. The model
given in (LP1) also ensured that the shadow price of polluting inputs is 3.4. Spatial regression
the same regardless of which sub-technology, T1 or T2, is considered due
to the link between the two sub-technologies. The spatial regression is used when considering spatial spill-overs
Pollution-generating inputs produce desirable outputs in T1 and (correlation). In this research, the spatial regression is used to test if
generate pollution in T2. In addition, it should be noted that πpx is positive certain factors influence the shadow price of pollutant emissions in 30
because it represents the contribution of pollution input to shadow profit provinces of China. Both fixed and random effect models are applied.
in the process of sub-technology T1; however, ωpx can be either positive The SAR mainly explores whether each variable has a diffusion phe­
or negative. When it is positive, it means generation of shadow cost, and nomenon (spillover effect) in a region (Han, 2021); the SEM describes
when it is negative, it refers to shadow profit. The goal of this model is to the spatial disturbance correlation and the spatial overall correlation.
find the minimum distance from the production frontier and use this as a The SDM allows the impact of each influence factor to be divided into
basis to improve the production process. direct and indirect effects. The direct effects indicate the extent to which
the factors affect the dependent variable in each region. As for the in­
direct effects, they capture the spillover effects, that is, the extent to
3.3. Shadow pricing of undesirable outputs
which the factors included in the model affect neighboring regions.
Ignoring the spatial effects may indice bias in the OLS, FE, and RE
The shadow perices can be recovered by using the shadow values
models.
discussed in the preceding sub-section. The ratio of shadow values
connected with the undesirable output to those associated with a
4. Data and results
desirable good output is the shadow price of a certain undesirable
output. Note that further adjustment is needed in case the desirable
4.1. Data
output is not expressed in monetary terms. Thus, shadow price shows
how the desirable and undesirable outputs can be substituted main­
The environmental production technology may include capital stock,
taining the same level of the shadow profit. As the three undesirables are
labor force, energy consumption, and gross domestic product as inputs
used in this study, the following equations are applied for the CO2, SO2,
and the output of pollutants studied as output (Boussemart et al., 2017;
and dust (particulate matter) shadow prices:
Shen et al., 2021a,b). Therefore, capital stock (K), the labor force (L),
ωCO 2
energy consumption (E) are the inputs, and gross domestic product
CSP = z
(3)
π GDP
y (GDP) is selected as an output in this study. Carbon, sulfur, dust emis­
sions are undesirable outputs for which we calculate the shadow prices.
ωSO 2 Capital stock in this study is represented by the industrial assets (priced
SSP = z
(4)
πy
GDP at RMB 100 million of 1998), labor input is the number of industrial
employees, and energy consumption is the final industrial sector energy

4
Z. Yue et al. Journal of Cleaner Production 387 (2023) 135914

consumption. We include 30 provinces with full data availability in the

mainland China1 to investigate the shadow price in lines with Xu et al.
(2022).
To identify factors that influence the shadow prices of CO2 emissions,
SO2 emissions, and dust, this study considers several variables. Foreign
direct investment refers to the direct investment of foreign enterprises
and economic organizations or individuals, using cash, physical objects,
technologies etc. Setting up a foreign-owned firm in China, forming a
Sino-foreign joint venture, forming a cooperative venture, or collabo­
rating on resource development with Chinese enterprises or economic
groups (including reinvestment of foreign investment income) are the
examples of FDI (Guariglia et al., 2008). Also, funds borrowed by en­
terprises from abroad within the total project investment are considered
as the FDI in consent of the relevant public authorities.
Earlier studies have shown a negative relationship between FDI and
pollution, i.e., FDI may favorably affect ecological situation (Asiedu,
2021; Bhujabal et al., 2021). Foreign firms that focus on export can Fig. 1. Average shadow prices (CSP, SSP, DSP) in 30 provinces. Note: The value
improve energy efficiency and water quality in China significantly. FDI of CSP is represented by the y-axis on the right.
improves energy efficiency through ecologically oriented technological
advances, water quality, as well as air quality through reduce industrial emissions (Ashford and Zwetsloot, 2000; Lefebvre
production-oriented technological advances (Chen et al., 2021; Zeng et al., 2003; Lin and Baldwin, 2002). These are conducive to improving
and Zhou, 2021). The earlier literature has also suggested that the stock the independent innovation capacity of enterprises, promoting
of general pollution will decrease if developed countries are willing to energy-saving and industrial enterprises’ emission reduction, and
provide complementary investment to developing countries. In addi­ significantly contributing to the level of regional green development
tion, the balanced emission strategies of both types of countries will be (Tan-Soo et al., 2018; Zhang et al., 2016; Chen et al., 2016; Yang et al.,
increased by supplementary investment. This means more economic 2016). That is, as Rausch and Reilly (2012) found out that the level of
benefits for both partners (Xiao et al., 2022). technology affects the environmental performance of a region. In addi­
Earlier literature found that FDI significantly improves air quality tion, earlier studies considered individual or corporate income tax rates
and reduces pollution. In addition, research showed that air pollution and their impact on environment (Perroni, 1995). Therefore, the
significantly hinder technological innovation (Lin et al., 2020); it has corporate income tax may also have an impact on the environmental
seriously hindered China’s innovation and technological progress (Liu performance.
et al., 2021). Air pollution can be the obstruction of technological Therefore, this study selects three variables: FDI, technology export
innovation, which provides an indispensable and continuous motivation volume (tmtor), and corporate income tax (cit) as factors behind vari­
for energy efficiency and green economic development (Zhao et al., ation in CSP, SSP, and DSP. The data come from the National Bureau of
Statistics and the China Energy Statistical Yearbook. The descriptive
statistics are shown in Table 1.
Table 1
Descriptive statistics.
Variable Mean Min Max St.Dev 4.2. Results
(dimension)

CSP(103$/ton) 11.12 0.026 245.61 12.87

The by-production DEA model was used to gauge the CSP, SSP, and
SSP(103$/ton) 122.18 0.065 10,902.37 590.12 DSP. The resulting measures are then plotted for the period of
DSP(103$/ton) 102.05 0.058 3072.47 179.19 1997–2019. Fig. 2 shows changes in CSP, SSP, and DSP. Generally, the
K (billion yuan) 2,351,676.50 39,146.22 17,246,523.90 2,851,994.22 three shadow prices follow a similar trend.
L (billion person) 6.28 0.31 26.15 5.88
As seen from Fig. 1, shadow prices for all three emissions (CSP, SSP,
E (billion tonnes) 106.50 3.90 413.90 79.99
GDP (billion 539,096.73 6685.00 3,996,926.38 661,248.32 DSP) tended to increase during the period covered. Particularly, SSP
yuan) increased at a significantly faster rate after 2015, DSP showing a fluc­
CO2 (billion ton) 2.28 0.07 9.12 1.81 tuating upward trend, and CSP showing little change or a slight increase.
SO2 (billion ton) 0.55 0.00 1.83 0.39
Dust (billion ton) 0.37 0.01 1.83 0.28
fdi (billion yuan) 95.60 0.24 1953.25 193.60
tmtor (billion 17,114.54 5.99 569,528.43 49,241.89
yuan)
cit (billion yuan) 16,916.51 55.33 200,121.00 27,404.63

Note: exchange rate between US dollar and Chinese Yuan is initialized at a fixed
level (1$ = 6.5 Yuan).

2020). Increasing investment in science and technology, introducing

environmental protection and energy-saving technologies, environ­
mental governance, and green economic growth can be promoted to

1
30 observations are Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia,
Liaoning, Jilin, Heilongjiang, Shanghai, Jiangsu, Zhejiang, Anhui, Fujian,
Jiangxi, Shandong, Henan, Hubei, Hunan, Guangdong, Guangxi, Hainan,
Chongqing, Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia, and Fig. 2. Scatter chart between technology export volume and CSP, SSP and DSP.
Xinjiang. Note: The value of CSP is represented by the y-axis on the right.

5
Z. Yue et al. Journal of Cleaner Production 387 (2023) 135914

increasing. The shadow prices of all three pollutants show an upward

trend, indicating that the environmental performance of Chian has been
improving, i.e., the marginal abatement costs have increased. Figs. 2–4
show the relationships between three factors and three shadow prices.
As we can see from the scatter plots, there are direct relationships be­
tween them.
Moran index is a comprehensive measure used to evaluate the degree
of spatial correlation. The smaller the p-value of the Moran test, the
greater the spatial correlation, and vice versa. If spatial regression will
be used, one must check if there is a spatial correlation. We perform
Moran’s I test on the calculated shadow price of CO2 emission, sulfur
dioxide emission, and dust to check whether there is a spatial correla­
tion. The results are shown in Table 2.
From Table 2 one can see that the p-values of CSP, SSP, and DSP are
all lower than 0.05, showing that spatial correlation is significant for all
Fig. 3. Scatter chart between corporate income tax and CSP, SSP and DSP. the variables considered. Spatial regression can be used to further
Note: The value of CSP is represented by the y-axis on the right. explore spatial effects of the factors. From the LR (lag) and LR (error) test
results, the hypothesis that SDM will degenerate into SEM and SAR is
rejected since its p-value is lower than 0.05, which shows the use of the
spatial Durbin model is rational.
The Ordinary Least Squares (OLS) is the basic econometric method
that can provide estimates to be used as the baseline model. Therefore,
OLS is used for regression in this study before applying the spatial
regression. Reasonable OLS results can motivate to carry out further
regression analyses. Therefore, based on the above reasons and referring
to relevant literature on the factors of environmental performance (Shi
and Harrison, 1997; Chen et al., 2019; Yue et al., 2022), we first conduct
OLS and then turn to spatial regression analysis. Tables 3 and 4 show the
estimates rendered by different regression models.
The Moran test found that the data were spatially correlated, and
therefore, a spatial econometric model was chosen. The test showed that
the SDM does not degenerate into SEM or SAR. Therefore, the results of
the SDM model are relevant.
OLS coefficients were significant for all the variables; among fixed
Fig. 4. Relationship between FDI and CSP, SSP and DSP. Note: The value of and random effects, all variables were also significant, except for the
CSP is represented by the y-axis on the right. variable lntmtor, which was not significant for lndsp. This indicates that
almost all variables including lnfdi, lntmtor, lncit are significant to
lncsp, lnssp, and lndsp when spatial interactions are not considered.
Table 2 Under the SAR model, foreign direct investment, corporate income tax,
Moran’s I test. and the amount of technology exported from the technology market all
Variable Moran’s I P-value have a considerable impact on the shadow price of carbon dioxide
CSP 0.500 0.000*** emissions, where an increase in fdi and the amount of technology
SSP 0.144 0.025** exported from the technology market leads to the rise in the shadow
DSP 0.450 0.000*** price of carbon dioxide, i.e., promoting better environmental conditions.
Note: ***: p ≤ 0.01; **: p ≤ 0.05; *: p ≤ 0.1. In contrast, with an increase in corporate income tax, the shadow price
of carbon dioxide decreases, i.e., an increase in corporate taxation will
The rapid growth of SSP is likely to be related to the 2014–2015 Action lead to a worse environmental situation. There is a positive relationship
Plan for Energy Conservation, Emission Reduction and Low-Carbon between fdi and the shadow price of dust. In contrast, corporate income
Development formulated to achieve the binding target of reducing the tax has a significant negative impact on the shadow price of sulfur di­
total discharge of major pollutants (such as carbon, sulfur, and dust) in oxide. Under the SEM, FDI has a remarkable positive impact on the
the twelfth Five-Year Plan. Before 2010, DSP had been on an upward shadow price of carbon dioxide and dust; the amount of technology
trend, and after 2018, DSP is also on the rise. However, during exported from the technology market has a remarkable positive impact
2010–2018, DSP fluctuated greatly, but the overall trend was still on the shadow price of carbon dioxide (Donni, 2008), and corporate

Table 3
Results of OLS, FE, RE.
LNCSP LNSSP LNDSP

OLS FE RE OLS FE RE OLS FE RE

lnfdi 0.192*** 0.119** 0.182*** 0.404*** 0.423*** 0.474*** 0.428*** 0.200*** 0.389***
(0.026) (0.057) (0.040) (0.029) (0.067) (0.047) (0.036) (0.065) (0.050)
lntmtor 0.126*** 0.067*** 0.082*** 0.293*** 0.124*** 0.161*** 0.238*** 0.003 0.048*
(0.021) (0.025) (0.024) (0.025) (0.030) (0.028) (0.026) (0.029) (0.028)
lncit − 0.133*** − 0.167*** − 0.157*** − 0.393*** − 0.462*** − 0.445*** − 0.279*** − 0.393*** − 0.362***
(0.014) (0.012) (0.010) (0.016) (0.013) (0.012) (0.015) (0.013) (0.012)
_cons 4.895*** 6.852*** 5.642*** 1.775*** 3.617*** 2.326*** 2.031*** 8.764*** 5.106***
(0.283) (0.925) (0.618) (0.371) (1.083) (0.711) (0.396) (1.048) (0.773)

6
Z. Yue et al. Journal of Cleaner Production 387 (2023) 135914

Table 4
Results of SAR, SEM, SDM.
lncsp lnssp lndsp

SAR SEM SDM SAR SEM SDM SAR SEM SDM

lnfdi 0.103* 0.106* 0.105* 0.085 0.085 0.081 0.138** 0.139** 0.130**
(0.059) (0.058) (0.061) (0.057) (0.057) (0.059) (0.059) (0.059) (0.061)
lntmtor 0.052** 0.049* 0.034 0.017 0.018 0.018 0.026 0.026 0.030
(0.026) (0.027) (0.028) (0.025) (0.025) (0.027) (0.026) (0.026) (0.028)
lncit − 0.044 − 0.041 − 0.073 − 0.105* − 0.107* − 0.086 − 0.082 − 0.081 − 0.059
(0.065) (0.064) (0.068) (0.064) (0.064) (0.066) (0.066) (0.066) (0.068)
Spatial-rho − 0.210*** − 0.210*** − 0.010 − 0.006 0.031 0.022
(0.060) (0.058) (0.058) (0.054) (0.054)
Spatial-lambda − 0.203*** − 0.018 0.022
(0.059) (0.058) (0.054)
W × lnfdi 0.127 0.090 0.105
(0.118) (0.114) (0.118)
W × lntmtor − 0.081 0.052 0.076
(0.062) (0.060) (0.063)
W × lncit 0.002 − 0.231* − 0.237*
(0.129) (0.125) (0.130)

income tax has a significant negative impact on the shadow price of is also a wake-up call for policymaking. Perhaps the authorities can
sulfur dioxide emissions. consider whether policies related to the reduction of sulfur dioxide and
dust can be applied to the reduction of CO2. Even if the three pollutants
are very different, or some properties of the three pollutants are very
4.3. Discussion different, the policy cannot be directly adopted.

From Fig. 2, we can see that the shadow price in recent years are
increasing rapidly, which corroborates the results reported by Xie et al.
(2015) and Cheng et al. (2019) who found that PM2.5 shows a spatial
correlation. After extending the research object to carbon pollution, as
we can see from Table 4, the results of spatial regression analysis showed
that the shadow price of carbon pollution still has a strong spatial cor­
relation. Under the SDM model, foreign direct investment is positively
and directly related to the shadow prices of both CO2 and dust; corporate
income tax is significantly negatively related to the shadow prices of
sulfur dioxide and dust in neighboring provinces. In other words, when
the policies of neighboring provinces lead to a higher corporate income
tax, the province is also affected, resulting in poorer emission
reductions.
5. Conclusion
This study calculated the shadow prices of three major pollutants by
using a nonparametric by-production method. The BP model is a model
in which two sub-technologies T1 and T2 are used to represent the whole
production technology. This study uses a BP model that considers the
relationship between the two sub-technologies based on the most basic
BP model. Different from those study that only focuses on the shadow
price. We use the shadow price to explore how FDI influences environ­
mental performance. What’s more, this study uses the spatial model to
prevent spurious regression. At the end of this study, we made some
targeted policy recommendations.
The shadow prices of sulfur dioxide emissions and dust have gener­
ally been on the rise in recent years in China, suggesting that the
treatment of these two pollutants and the formulation of related policies
and measures have been more effective in China, while the shadow price
of carbon dioxide shows slightly increasing trend. The reasons for this
slightly increasing trend can be associated with the fact that CO2 is
difficult to reduce due to its nature.
China, which has a huge demand for coal, emitted nearly 10 billion
tons of carbon dioxide in 2012, more than the United States and the
European Union combined, and nearly a third of global emissions.
Despite having a population of 1.3 billion, China’s per capita emissions
are still higher than the per capita emissions of France, Italy, and Spain,
and almost equal to the EU average. Although China’s use of clean en­
ergy is gradually increasing, fossil fuels, mainly coal, still account for
nearly 70% of China’s power generation capacity. Therefore, the result
6. Policy design implications
The provinces of China can improve their environmental perfor­
mance by attracting foreign investment and increasing foreign invest­
ment, and by increasing investment in technology and giving tax breaks
to industrial enterprises; at the same time, the introduction of foreign
investment can form regionalized clusters of foreign investment-
introducing provinces, as an increase in foreign investment in neigh­
boring provinces will also have a remarkable positive impact the envi­
ronmental performance of the province; finally, from the spatial
regression results, when the corporate income tax increases in neigh­
boring provinces, the provincial policy-making departments should be
vigilant because the enterprises in the province may cause a psycho­
logical burden and lead to a worse reduction in emissions, so the policies
in the province should be adjusted appropriately to ensure that the
environmental situation does not deteriorate.
Therefore, the government should pay attention to the role of FDI,
tmtor and cit in promoting emission reduction when making policies:
cultivating major projects, innovating investment measures and creating
a good market investment environment to attract foreign investment;
For the regions with better technological development, it is necessary to
promote the transfer of technology and attract the inflow of new tech­
nology. For example, it is necessary to attract high-tech talents by
improving employee treatment and welfare policies. In addition, the
government can also set up tax relief related to emission reduction, such
as some corporate income tax relief for enterprises with good emission
reduction effects, which can promote enterprises to attach importance to
and make efforts to emission reduction. In addition, the spatial regres­
sion analysis conducted by using the spatial Dubin model in this study
confirmed that there is a spatial correlation between FDI and shadow
prices. Therefore, when specifying local emission reduction policies, we
can consider forming regional groups with neighboring provinces to
attract foreign investment. In this way, as long as a province in the re­
gion has increased foreign direct investment, can indirectly promote the
provincial energy conservation and emission reduction work.
The limitation of our study is that we only investigate the shadow
price of pollutants in China. In further studies, one may include more
countries into the sample. The directional distance function in by-
production model is measured by nonparametric approach in this
paper. One may also apply the parametric method to estimate shadow

7
Z. Yue et al. Journal of Cleaner Production 387 (2023) 135914

prices then compare results with nonparametric ones. interests or personal relationships that could have appeared to influence
the work reported in this paper.
Credit author statement
Data availability
Ziming Yue: Data, Computation, Writing the original draft. Lingyu
Meng: Writing the original draft. Yunguo Mu: Analyzing, Revising the Data will be made available on request.
manuscript. Tomas Baležentis: Methodology, Revising the manuscript.
Zhiyang Shen: Methodology, Computation, Writing the original draft, Acknowledgements
Revising the manuscript.
Shen Z. acknowledges the research fund from the National Natural
Declaration of competing interest Science Foundation of China (72104028) and the financial support from
the Beijing Institute of Technology Research Fund Program for Young
The authors declare that they have no known competing financial Scholars.

Appendix A. Abbreviations and literature used

Table A1
Abbreviations

Abbreviation Spelling

ASEAN Association of Southeast Asian Nations

BP by-production
cit corporate income tax
CO2 carbon dioxide
CSP carbon shadow price
DEA data envelopment analysis
DSP dust shadow price
E energy consumption
FDI foreign direct investment
FE fixed effect
GDP and gross domestic product
K capital stock
L the labor force
MAC marginal abatement cost
OECD Organization for Economic Co-operation and Develop
OLS ordinary least squares
PM2.5 fine particulate matter
RE random effect
SAR spatial autoregressive model
SDM spatial Dubin model
SEM spatial error model
SO2 sulfur dioxide
SSP sulfur shadow price
tmtor technology market technology export amount
WHO World Health Organization
WTO World Trade Organization

Table A2
Literature table

Reference Key terms

(1) Ozarisoy (2022) carbon dioxide

(2) Cui et al. (2022)
(1) Kamaruddin et al. (2014) PM2.5
(2) Oh et al. (2022)
(3) Wang et al. (2022)
(1) Choi et al. (2012) Parametric method
(2) Cheng et al. (2019)
(3) Du et al. (2016)
(4) Maziotis et al. (2020)
(5) Pittman (1981)
(6) Rodseth (2013)
(7) Wang and Su (2013)
(8) Wang et al. (2018)
(9) Xie et al. (2015)
(10) Zhou et al. (2014)
(11) Zhou et al. (2015)
(1) Charnes et al. (1978) Nonparametric method
(2) Liu et al. (2011)
(3) Murty et al. (2012)
(continued on next page)

8
Z. Yue et al. Journal of Cleaner Production 387 (2023) 135914

Table A2 (continued )
Reference Key terms

(4) Shen et al., 2021a,b

(5) Tone, 2001
(6) Yu et al. (2019)

References Molinos-Senante, M., Hanley, N., Sala-Garrido, R., 2015. Measuring the CO2 shadow
price for wastewater treatment: a directional distance function approach. Appl.
Energy 144, 241–249.
Ashford, N.A., Zwetsloot, G., 2000. Encouraging inherently safer production in European
Murty, M.N., Kumar, S., Dhavala, K.K., 2007. Measuring environmental efficiency of
firms: a Report from the field. J. Hazard Mater. 78 (1–3), 123–144.
industry: a case study of thermal power generation in India. Environ. Resour. Econ.
Asiedu, B.A., 2021. Do international investment contribute to environmental pollution?
38 (1), 31–50.
Evidence from 20 African countries. Environ. Sci. Pollut. Control Ser. (1).
Murty, S., Russell, R.R., Levkoff, S.B., 2012. On modeling pollution-generating
Balězentis, T., Blancard, S., Shen, Z., Štreimikiene, D., 2021. Analysis of environmental
technologies. J. Environ. Econ. Manag. 64 (1), 117–135.
total factor productivity evolution in European agricultural sector. Decis. Sci. J. 52
Nabavi-Pelesaraei, A., Bayat, R., Hosseinzadeh-Bandbafha, H., Afrasyabi, H., Chau, K.W.,
(2), 483–511.
2017. Modeling of energy consumption and environmental life cycle assessment for
Bhujabal, P., Sethi, N., Padhan, P.C., 2021. ICT, foreign direct investment and
incineration and landfill systems of municipal solid waste management-A case study
environmental pollution in major Asia Pacific countries. Environ. Sci. Pollut. Control
in Tehran Metropolis of Iran. J. Clean. Prod. 148, 427–440.
Ser. 1–21.
Nabavi-Pelesaraei, A., Mohammadkashi, N., Naderloo, L., Abbasi, M., Chau, K.W., 2022.
Boussemart, J.P., Leleu, H., Shen, Z., 2017. Worldwide carbon shadow prices during
Principal of environmental life cycle assessment for medical waste during COVID-19
1990–2011. Energy Pol. 109, 288–296.
outbreak to support sustainable development goals. Sci. Total Environ. 827, 154416.
Charnes, A., Cooper, W.W., Rhodes, E., 1978. Measuring the efficiency of decision
Oh, E., Choi, K.H., Kim, S.R., Kwon, H.J., Bae, S., 2022. Association of indoor and
making units. Eur. J. Oper. Res. 2 (6), 429–444.
outdoor short-term PM2. 5 exposure with blood pressure among school children.
Chen, J.D., Cheng, S.L., Song, M.L., Wang, J., 2016. Interregional differences of coal
Indoor Air 32 (3), e13013.
carbon dioxide emissions in China. Energy Pol. 96, 1–13.
Ozarisoy, B., 2022. Energy effectiveness of passive cooling design strategies to reduce the
Chen, L., Zhuo, Y., Xu, Z., Xu, X., Gao, X., 2019. Is carbon dioxide (CO2) emission an
impact of long-term heatwaves on occupants’ thermal comfort in Europe: climate
important factor affecting healthcare expenditure? Evidence from China,
change and mitigation. J. Clean. Prod. 330, 129675.
2005–2016. Int. J. Environ. Res. Publ. Health 16 (20), 3995.
Ozarisoy, B., Altan, H., 2021. Developing an evidence-based energy-policy framework to
Chen, Z., Paudel, K.P., Zheng, R., 2021. Pollution halo or pollution haven: assessing the
assess robust energy-performance evaluation and certification schemes in the South-
role of foreign direct investment on energy conservation and emission reduction.
eastern Mediterranean countries. Energy Sustain. Dev. 64, 65–102.
J. Environ. Plann. Manag. 1–46.
Perroni, C., 1995. Income Taxation, Environmental Emissions, and Technical Progress (No.
Cheng, S., Lu, K., Liu, W., Xiao, D., 2019. Efficiency and marginal abatement cost of
2068-2018-857.
PM2.5 in China: a parametric approach. J. Clean. Prod. 235 (OCT.20), 57–68.
Pittman, R.W., 1981. Issue in pollution control: interplant cost differences and economies
Choi, Y., Ning, Z., Zhou, P., 2012. Efficiency and abatement costs of energy-related CO2
of scale. Land Econ. 57.
emissions in China: a slacks-based efficiency measure. Appl. Energy 98, 198–208.
Rausch, S., Reilly, J., 2012. Carbon Tax Revenue and the Budget Deficit: A Win–Win-Win
Cui, L., Mu, Y., Shen, Z., Wang, W., 2022. Energy transition, trade and green productivity
Solution? mit joint program on the science & policy of global change.
in advanced economies. J. Clean. Prod., 132288
Rodseth, K.L., 2013. Capturing the least costly way of reducing pollution: a shadow price
Dakpo, K., Lansink, A.O., 2018. Dynamic pollution-adjusted inefficiency under the by-
approach. Ecol. Econ. 92 (aug), 16–24.
production of bad outputs. Eur. J. Oper. Res. 276 (1), 202–211.
Shen, Z., Bai, K., Hong, T., Balezentis, T., 2021a. Evaluation of carbon shadow price
Donni, O., 2008. Labor supply, home production, and welfare comparisons. J. Publ.
within a non-parametric meta-frontier framework: the case of OECD, ASEAN and
Econ. 92 (7), 1720–1737.
BRICS. Appl. Energy 299, 117275.
Du, L., Hanley, A., Zhang, N., 2016. Environmental technical efficiency, technology gap
Shen, Z., Li, R., Baležentis, T., 2021b. The patterns and determinants of the carbon
and shadow price of coal-fuelled power plants in China: a parametric meta-frontier
shadow price in China’s industrial sector: a by-production framework with
analysis. Resour. Energy Econ. 43, 14–32.
directional distance function. J. Clean. Prod. 323, 129175.
Guariglia, A., Poncet, S., Economics, J., Berkowitz, D., Roland, G., 2008. Could financial
Shi, J.P., Harrison, R.M., 1997. Regression modelling of hourly NOx and NO2
distortions be no impediment to economic growth after all? Evidence from China.
concentrations in urban air in London. Atmos. Environ. 31 (24), 4081–4094.
J. Comp. Econ. 36, 633–657.
Singh, A., Gundimeda, H., 2021. Measuring technical efficiency and shadow price of
Han, H., 2021. Study on Monitoring the ecological environment by SAR model. IOP Conf.
water pollutants for the leather industry in India: a directional distance function
Ser. Earth Environ. Sci. 781 (5), 052017.
approach. J. Regul. Econ. 59 (1), 71–93.
He, Y., 2021. Calculation, elasticity and regional differences of agricultural greenhouse
Song, C., Wu, L., Xie, Y., He, J., Chen, X., Wang, T., Liu, Y., 2017. Air pollution in China:
gas shadow prices. Sci. Total Environ. 790 (2), 148061.
status and spatiotemporal variations. Environ. Pollut. 227 (aug), 334–347.
Hille, E., 2018. Pollution havens: international empirical evidence using a shadow price
Tan-Soo, J.S., Qin, P., Zhang, X.B., 2018. Power stations emissions externalities from
measure of climate policy stringency. Empir. Econ. 54 (3), 1137–1171.
avoidance behaviors towards air pollution: evidence from Beijing. Energy Pol. 121,
Kamaruddin, A.S., Jalaludin, J., Choo, C.P., 2014. Indoor Air Quality and its Association
336–345.
with Respiratory Health Among Malay Preschool Children in Shah Alam and Hulu
Tone, K., 2001. A slacks-based measure of efficiency in data envelopment analysis. Eur.
Langat, Selangor. Doctoral dissertation, Universiti Putra Malaysia.
J. Oper. Res. 130 (3), 498–509.
Lee, C.Y., Zhou, P., 2015. Directional shadow price estimation of CO2, SO2 and NOx in
Tsagris, M., Tzouvelekas, V., 2022. Nitrate leaching and efficiency measurement in
the United States coal power industry 1990–2010. Energy Econ. 51, 493–502.
intensive farming systems: a parametric by-production technology approach. Agric.
Lefebvre, L., Lefebvre, L.A., Talbot, S., 2003. Determinants and Impacts of Environmental
Econ. 53 (4), 633–647.
Performance in SMEs. R&D Management.
Vardanyan, M., Noh, D.W., 2006. Approximating pollution abatement costs via
Li, Z., Mao, X., Liu, Q., Song, H., Wang, J., 2019. Long-term effect of exposure to ambient
alternative specifications of a multi-output production technology: a case of the US
air pollution on the risk of active tuberculosis. Int. J. Infect. Dis. 87.
electric utility industry. J. Environ. Manag. 80 (2), 177–190.
Li, Y., Wei, Y., Zhang, X., Tao, Y., 2020. Regional and provincial CO2 emission reduction
Wang, D., Su, L., 2013. Shadow price measurement of industrial carbon dioxide emission
task decomposition of China’s 2030 carbon dioxide emission peak based on the
in Shenzhen. China Opening J. 21 (5), 68–71.
efficiency, equity and synthesizing principles. Struct. Change Econ. Dynam. 53.
Wang, K., Yang, K., Wei, Y.M., Zhang, C., 2018. Shadow prices of direct and overall
Lin, Z., Baldwin, J.R., 2002. Impediments to advanced technology adoption for Canadian
carbon dioxide emissions in Chinas construction industry: a parametric directional
manufacturers. Res. Pol. 31 (1), 1–18.
distance function-based sensitive estimation. Struct. Change Econ. Dynam. 47,
Lin, S., Xiao, L., Wang, X., 2020. Does air pollution hinder technological innovation in
180–193.
China? A Perspective of Innovation Value Chain. J. Clean. Prod. 278, 123326.
Wang, G., Shi, Q., Wang, H., Sun, K., Lu, Y., Di, K., 2022. Multi-modal image feature
Liu, M., Zhu, L., Fan, Y., 2011. Provincial carbon dioxide emission performance
fusion-based PM2.5 concentration estimation. Atmos. Pollut. Res. 13 (3), 101345.
evaluation and marginal emission reduction cost estimation in China: based on
Wu, X., Gao, M., 2021. Effects of different environmental regulations and their
nonparametric distance function method. China Soft Sci. 25 (3), 106–114.
heterogeneity on air pollution control in China. J. Regul. Econ. 1–27.
Liu, P., Dong, D., Wang, Z., 2021. The impact of air pollution on R&D input and output in
Xiao, L., Chen, Y., Wang, C., Wang, J., 2022. Transboundary pollution control in
China. Sci. Total Environ. 752, 141313.
asymmetric countries: do assistant investments help? Environ. Sci. Pollut. Control
Maziotis, A., Villegas, A., Molinos-Senante, M., 2020. The cost of reducing unplanned
Ser. 29 (6), 8323–8333.
water supply interruptions: a parametric shadow price approach. Sci. Total Environ.
Xie, H., Shen, M., Wei, C., 2015. Technical efficiency, shadow price and substitutability
719, 137487.
of Chinese industrial SO2 emissions: a parametric approach. J. Clean. Prod. 112,
Molinos-Senante, M., Guzmán, C., 2018. Reducing CO2 emissions from drinking water
1386–1394.
treatment plants: a shadow price approach. Appl. Energy 210, 623–631.
Xu, C., Wang, B., Chen, J., Shen, Z., Song, M., An, J., 2022. Carbon inequality in China:
novel drivers and policy driven scenario analysis. Energy Pol. 170, 113259.

9
Z. Yue et al.
Yang, X., Wang, S., Zhang, W., Li, J., Zou, Y., 2016. Impacts of energy consumption,
energy structure, and treatment technology on SO2 emissions: a multi-scale LMDI
decomposition analysis in China. Appl. Energy 184, 714–726.
Yu, A., et al., 2019. Industrial carbon abatement allocations and regional collaboration:
Re-evaluating China through a modified data envelopment analysis. Appl. Energy
233, 232–243.
Yue, H., Duan, L., Lu, M., Huang, H., Zhang, X., Liu, H., 2022. Modeling the determinants
of PM2. 5 in China considering the localized spatiotemporal effects: a multiscale
geographically weighted regression method. Atmosphere 13 (4), 627.
Zeng, S., Zhou, Y., 2021. Foreign direct investment’s impact on China’s economic
growth, technological innovation and pollution. Int. J. Environ. Res. Publ. Health 18
(6), 2839.
10
Journal of Cleaner Production 387 (2023) 135914
Zhang, L., Geng, Y., Dong, H., Zhong, Y., Fujita, T., Xue, B., Park, H., 2016. Emergy-based
assessment on the brownfield redevelopment of one old industrial area: a case of
Tiexi in China. J. Clean. Prod. 114, 150–159.
Zhao, M., Liu, F., Song, Y., Geng, J., 2020. Impact of air pollution regulation and
technological investment on sustainable development of green economy in eastern
China: empirical analysis with panel data approach. Sustainability 12.
Zhou, P., Zhou, X., Fan, L.W., 2014. On estimating shadow prices of undesirable outputs
with efficiency models: a literature review. Appl. Energy 130, 799–806.
Zhou, X., Fan, L.W., Zhou, P., 2015. Marginal CO2 abatement costs: findings from
alternative shadow price estimates for Shanghai industrial sectors. Energy Pol. 77,
109–117.