This study aims to investigate the extent to which digital economy imports can mitigate the environmental costs incurred by developing countries when attracting foreign direct investment (FDI). Previous research indicates that while FDI brings numerou...
This study aims to investigate the extent to which digital economy imports can mitigate the environmental costs incurred by developing countries when attracting foreign direct investment (FDI). Previous research indicates that while FDI brings numerous economic benefits such as capital accumulation, industrial advancement, and employment growth, it is also accompanied by increased energy consumption and high-emission production activities, thereby exacerbating environmental burdens. These negative impacts are reportedly particularly pronounced in developing countries characterized by fossil fuel-dominated energy structures, weak infrastructure, and limited technological absorption capacity.
Given these structural constraints, this study focuses on how digital economy imports compensate for institutional and technological deficiencies such as inadequate infrastructure, low absorption capacity, and imperfect regulatory systems and how these changes alter the interaction pathways between FDI and the environment. Findings indicate that while FDI inflows generally increase carbon emissions, digital economy imports significantly mitigate these negative impacts, demonstrating a so-called “digital mitigation effect.” This suggests that cross-border digital resources not only generate economic value but also serve short-term environmental management functions, implying their greater importance in developing countries facing multiple structural constraints.
This conclusion expands our understanding of the environmental impacts of the digital economy and foreign direct investment, while also providing actionable policy insights for developing countries pursuing green openness, strengthening digital infrastructure, and refining environmental policies related to foreign investment.