An Evaluation of the Efficiency of China’s green investment in the “Belt and Road” countries

• China's green investment efficiency (GIE) in the “Belt and Road” (B&R) countries is estimated. • The influence of the domestic investment environment of B&R countries on GIE is investigated. • A minimum distance to a strong efficient frontier approach (Min-DS) and spatial lag model (SLM) are employed. • The overall level of China's GIE in B&R countries has been at a relatively low level. • The domestic investment environment of B&R countries has a negative effect on China's GIE. GI (Green Investment) plays an important role in China's building of the Green B&R (Belt and Road). Studying China's GIE (Green Investment Efficiency) not only investigates the effectiveness and progress of the construction of “B&Rs” but also establishes a foundation for China's reasonable investment decisions. In this paper, we first employed Min-DS-U-M (a minimum distance to a strong efficient frontier with an undesirable output model) to evaluate China's GIE in 51 B&R countries from 2009 to 2018 and subsequently analyzed the influence of the domestic investment environment of B&R countries on GIE with SLM (Spatial Lag Model). The study results showed that (1) China's GIE in B&R countries is low, and there is still great potential for investment and cooperation. (2) In 51 B&R countries, there are nine countries whose GISE (Green Investment Scale Efficiency) is invalid and ten countries whose GIPTE (Green Investment Pure Technical Efficiency) is invalid. Moreover, both GISE and GIPTE of 24 countries are invalid. (3) The B&R countries have formed a solid spatial cluster, and the spatial advantage cluster shows a gradual expansionary trend, which indicates that China's GI has improved the spatial agglomeration of B&R countries. (4) On the whole, the domestic investment environment of B&R countries has a negative influence. The restraining effect of industrialization on GIE is far greater than the total facilitation of service industrialization, technological investment and dependence on foreign trade.