The Nonlinear Impact of FDI on Economic Growth and Carbon Emissions: Evidence from RCEP Countries

To investigate the decoupling effect of Foreign Direct Investment (FDI) on carbon emissions, this study employs nonlinear panel models and threshold regression models to analyze the impact of FDI on economic growth and carbon emissions in RCEP member countries from 2000 to 2023. First, the Tapio decoupling model reveals that since 2012, the relationship between economic growth and carbon emissions has predominantly exhibited a weak decoupling state. Second, the results from the nonlinear panel models and threshold models indicate that FDI has a significant "U-shaped" nonlinear relationship with both economic growth and carbon emissions. Specifically, in terms of economic effects, FDI may initially suppress economic growth, but ultimately contribute to it. In terms of environmental effects, FDI initially shows emission reduction benefits, but may eventually intensify carbon emissions. The moderating effect model shows that digital infrastructure significantly weakens these "U-shaped" relationships, reducing the steepness of the original curves. Finally, based on this "U-shaped" relationship and the moderating role of digital infrastructure, policy suggestions are put forward to enhance the synergistic benefits of FDI for both economic development and environmental sustainability. The findings of this study shed new light on the classic debate concerning foreign direct investment (FDI), economic development, and environmental sustainability within the RCEP context.