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Based on the panel data of 46 countries in "Belt and Road" (B&R) from 2004 to 2016, this paper studies the impact of innovation investment and institutional quality on green total factor productivity (GTFP). Firstly, the ICRG database, World Bank WDI database, Traditional Foundation database, and Wind database are matched to obtain the balanced panel data of 46 countries along the B&R from 2004 to 2016. Secondly, the Malmquist-Luenberger index, which can be included in the unexpected output, is used to calculate the GTFP of countries along B&R. Thirdly, the evaluation system of national institutional quality of B&R is constructed from three dimensions (political institutional quality, economic institutional quality, and legal institutional quality), and the overall system quality of different countries is measured by entropy method. Finally, an empirical study is made on the relationship among innovation investment, institutional quality, and green total factor productivity. The results show that innovation investment has significantly promoted the GTFP of the B&R countries. It is worth noting that there is a non-linear relationship between innovation investment and GTFP in the B&R countries. With the improvement of overall system quality, political system quality, economic system quality, and legal system quality, the promotion effect of innovation investment on GTFP is further enhanced. In addition, the heterogeneity regression results show that the impact of innovation investment on GTFP is significantly heterogeneous in different regions of the B&R countries. Specifically, innovation investment has the greatest impact on GTFP in South Asia, followed by East Asia and Pacific, Europe and Central Asia, Middle East, and North Africa., (© 2021. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.)

Following the "Belt and Road" (B&R) initiative, China has significantly increased its outward direct investment (ODI). Although these investments help to boost these countries' productivity, their impacts on the environment are still controversial and deserve careful investigation. This study for the first time examines whether China's ODI has improved the green total factor productivity (GTFP), a comprehensive index for environmental quality and productivity. Moreover, a new data set composed of ICRG, World Bank WDI, Heritage Foundation, and Wind databases is used to match the panel data of 46 B&R countries for the period of 2003-2016. A newly developed dynamic threshold panel model with GMM characteristics is utilized to explore the possible nonlinear relationship with full consideration of heterogeneity. The empirical results indicate that there is no pollution shelter effect on China's ODI. With the increase in China's ODI, the GTFP of the B&R countries has been significantly improved. Additionally, China's ODI has a greater role in promoting GTFP in B&R countries with higher institutional quality. The positive effects of China's ODI on the GTFP of B&R countries depend on the institutional qualities of the countries, and the enhancement effect becomes greater when the countries have better institutions. There is also evidence that China's ODI significantly promoted the GTFP of countries in the East Asia and Pacific region, South Asia, Central Asia and Europe, while China's ODI did not significantly promote the GTFP of countries in the Middle East and North Africa., (Copyright © 2020 Elsevier Ltd. All rights reserved.)