How do domestic attributes affect international spillovers of environmental efficiency in Africa?

Existing literature highlights that foreign direct investment (FDI) and trade from environmentally efficient countries can boost environmental efficiency in host nations. However, no study has examined the cross-border environmental efficiency facilitated by FDI inflows and import connections in Africa. This study addresses this gap by exploring whether cross-border environmental efficiency from China and the United States of America (the US), via FDI and imports, is more pronounced in countries with lower domestic environmental efficiency and higher social capabilities. Using long-run System Generalised Method of Moments (S-GMM) approaches, data from 53 African nations from 2003 to 2021 are analysed, incorporating the spatial dependence of FDI inflows and imports. The results reveal that the impact is most significant in nations with low domestic environmental efficiency and strong social capabilities. In addition, countries that integrate local environmental knowledge into their nationally determined contributions achieve greater efficiency. This study highlights the importance of enhancing social capabilities and regional cooperation to boost environmental efficiency across Africa.