Spatial Heterogeneity in Carbon Footprint from Belt and Road Investments Assessed Through a Cross-Sectional Autoregressive Distributed Lag Model

This study aims to empirically investigate the multifaceted impact of China's infrastructure-led foreign direct investment (FDI), tourism development, and technological innovation on carbon emissions within Belt and Road Initiative (BRI) participant countries. Moving beyond aggregate analysis, the research specifically examines the often-overlooked synergistic effect between FDI and tourism and explores the significant regional heterogeneities in these environmental relationships. Methodologically, the study employs second-generation panel data techniques to ensure robust estimations in the presence of cross-sectional dependence and slope heterogeneity. The analysis utilizes the Cross-Sectional Autoregressive Distributed Lag (CS-ARDL) and Common Correlated Effects Mean Group (CCEMG) estimators on data from 2000 to 2020 to discern both short-run and long-run dynamics. The key findings reveal a complex and dualistic role for FDI. While it is associated with a reduction in carbon emissions in full sample and in regions like Southeast Asia and Europe, it significantly increases emissions in South Asia and MENA countries. Critically, the interaction between FDI and tourism development is found to exacerbate carbon emissions, indicating that infrastructure investments amplify the environmental footprint of tourism. Furthermore, technological innovation consistently mitigates emissions, and the study validates the Environmental Kuznets Curve (EKC) hypothesis across all samples. The implications of these findings are profound for policymakers, underscoring the necessity of moving beyond one-size-fits-all approaches. The study's primary novelty lies in its explicit focus on infrastructure-led FDI, its quantification of the FDI-tourism interaction effect, and its groundbreaking regional disaggregation, which collectively reveal the contested and context-dependent nature of the BRI's environmental legacy. This granular analysis provides a critical evidence base for formulating targeted, region-specific policies to steer the BRI towards its stated goal of sustainable development.