Analysis Of Environmental Effects Of FDI

In recent years, with the expansion of international trade and increasingly serious environmental pollution, the relationship between FDI and the environment has highly attracted people's attention. As one of the most attractive destinations of FDI, FDI not only plays an important role in the development of China's economy, but also affects environment condition seriously. How to deal with the relationship between FDI and the environment has been the focus of future. The environment effects of FDI have been an important issue with theoretical and practical significance.In this paper, we focus on the eco-environmental effect of FDI in China. Firstly, we present the theories about FDI and the environment. Secondly, the relationship between FDI and environment pollution are researched by empirical data. Thirdly, the mechanisms of effects of FDI to environment pollution are analyzed in multiple perspectives. Fourthly, we use an econometric model to interpret the environment effect of FDI.The results are as follows:In China, the effects of FDI on environment is complex, dynamic among different regions. From the perspective of the whole country, there is a significant positive relationship between FDI and pollution. The relation curve between FDI and pollution is reverse U-shaped, which shows that FDI will get the positive effect on pollution firstly, and then make the negative effect. Basically, the average position of the whole country is at the left side of the curve. Based on the regional data from the Eastern. Middle and Western area of China, the paper find that the relationship between FDI and pollution is similar with the whole country. which also turns out to be a reverse U-shaped. However, the FDI in Eastern area of China holds the significant negative effect on the pollution, while the FDI in Middle and Western area of China hold the significant positive effect. These findings show that the Eastern area of China has passed the turn-point already, which is at the right side of the reverse U-shaped curve, while the Middle and the Western area of China is still at the left side of the curve. At last, we propose the proper suggestion.