HIGHLIGHTS
SUMMARY
To explore the mechanisms of FDI impacts on pollution, the authors decompose the changes in air pollution intensity into within-industry effects and betweenindustry effects. The authors move the typical decomposition of the effects on total pollution by scale, technology, and composition effects and focus on the effects on pollution intensity by decomposing them into within-industry and between-industry effects. For the full sample, the within-industry effects contributed to more than 100% of the pollution intensity reduction, while the between-industry effects contributed to -9.51% of the reduction in air pollution . . .
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