The Political Economy Of The "Pollution Haven" Hypothesis

The"pollution haven"hypothesis has long been a controversial issue. This paper tries to analyze the theoretic and empirical problems related"pollution haven"hypothesis by using the method of the modern political economy, and at the same time sets up a theoretic framework of the political economy of the"pollution haven"hypothesis.This paper has five parts in total. In the first part, through introducing the research background of this paper, we give some detailed and comprehensive reviews on domestic and foreign literature, and point out the research pathway and method. In the second part, we try to set up an analytical framework of the political economy of the"pollution haven"hypothesis, and inquire into the five questions under the framework. In the third part, according to the Cournot-Nash equilibrium solutions, we can find that the free movement of FDI is better for host country to strengthen environmental regulation stringency, and regional environmental cooperation will impose more restrictive environmental standards of FDI-host country than that under the non-cooperative solution. In the forth part, we use the Generalized Method of Moment to test the data of the Yangtze delta region of China and respectively estimate the scale, composition,regulation and"pollution haven"effects caused by FDI. The"pollution haven"effect is relatively weak in the Yangtze delta region, but we provide convincing evidences for the "pollution haven" effect. In the fifth part, we sum up all conclusions of this paper, and provide some related policy advices in the fact that China will become the"pollution haven". And some aspects are still left for future research that include the expansion of the theoretic analyses and the advanced empirical research.Benefiting from and based on the former research, the thesis has its own contributions to the field in the following aspects:1) government can come to the level of equilibrium pollution by shifting the environmental supply curve; 2) international capital movements exert ambiguous effects on the welfare of the absorbing capital country; 3) environmental spillovers that multinational companies of the developed countries bring can improve the environment in the developing countries; 4) an effective political market in the developed countries can reflect environmental preference of the different interest groups, and reduce the pollution arbitrage space by bargaining about environmental institutional supply; 5) international environmental cooperation can be an effective way to solve the transboundary pollution problems caused by"pollution haven"and would improve the level of the regional well-being.