Research On The Impact Of Environmental Regulation On Foreign Direct Investment In China

Up to now,due to the improvement of China’s openness to the outside world,China’s economic growth has also achieved remarkable results,in which foreign direct investment plays an important role,but the introduction of foreign capital also brings enormous pressure to the ecological environment.People are gradually paying more attention to environmental issues,and the government has taken a series of measures to protect the environment,which will have an impact on the inflow of foreign direct investment in China.Based on the existing literature,this article analyzes the relationship between the intensity of environmental regulations and foreign direct investment in China,and examines whether the intensity of environmental regulations indirectly affects foreign direct investment in China’s technological innovation process.This article first briefly analyzes China’s environmental regulations,technological innovation levels,and the development status of foreign direct investment in China,and then expounds the interaction mechanism between environmental regulations and the level of foreign direct investment in China.Environmental regulations affect China’s technological innovation level,and then affect the intermediary effect mechanism of foreign direct investment in China,Finally,using relevant data from 30 provinces in China(excluding Tibet)from 2000 to 2020 as research samples,using a two-way fixed effect and intermediary effect model,we empirically tested the correlation between environmental regulation intensity and China’s foreign direct investment level,and whether environmental regulation intensity affects China’s foreign direct investment level by influencing the level of technological innovation,And conducted a regional heterogeneity analysis to explore whether there will be different research conclusions between different regions.Regression results from a total sample of 30 provinces in China(excluding Tibet)indicate that increasing the intensity of environmental regulation is more conducive to expanding the scope of foreign direct investment.The intensity of environmental regulation is also important for the mediating effect of technological innovation,which in turn affects foreign investment projects in China.Based on the conclusion of the division of regional differences in China,the promotion effect of strict environmental regulation intensity on foreign direct investment in the eastern and western regions of China is significant,while in the central region,the improvement of environmental regulation intensity inhibits the inflow of foreign direct investment enterprises.For the central region of China,the intermediary effect of technological innovation on foreign direct investment is significant,while the eastern and western regions are not significant.In addition,this article also verifies the impact of business environment,infrastructure level,labor costs,and urbanization rate on foreign direct investment.Finally,based on the corresponding research conclusions,some policy recommendations with practical significance are proposed from various aspects.