The Empirical Analysis Of Relationship Between FDI And Environmental Pollution In Guangdong Province

Economic globalization is an important trend in world economic development, since the World War II, especially since the 90s of the 20th century. On the one hand, economic globalization is good for the rational allocation of the resources and production factors in the world, in favor of the global mobility of capital, products and technologies etc. But it is a double-edged sword for each country, especially for developing countries which are weak in the economic strength and are backward in science and technology. When these countries enjoyed the benefits brought by free trade and foreign investment, at the same time, they inevitably produced a growing number of environmental problems. This environment due to economic globalization is often called cross-border pollution issue or trans-boundary environmental issue. China, since the reform and opening up, has also quickly integrated into the wave of globalization. Especially after joining WTO, China has been playing an important role in the competitive arena of international community. At the same time, the environmental issues produced by free trade and foreign investment are also increasingly prominent, and even threat to the sustainable development of China's international trade. This paper selects China's window of reform and opening up - Guangdong Province as the research object, and explored and analyzed the environmental pollution issues produced by foreign direct investment from both theoretical and empirical.In this paper, the second chapter introduced and defined environmental issues, cross-border environmental problems and classification, and decrypted the environmental effects of FDI and related theories briefly. The third chapter described the environmental quality of Guangdong, and gave a qualitative description of the use of FDI from the size, structure and technical aspects separately, in recent overview in Guangdong Province. The fourth chapter is the empirical part, by constructing the time series model of Guangdong Province and nine cities in three levels of urban panel data model, using sequence stability test, co-integration test and Granger causality test and other measurement instruments, it inspected the relationship cause and effect between FDI and environmental pollution empirically, and the differences and similarities in association between the environmental pollution and the openness in different regions with different level of economic development. To further explore the ways in which FDI impacted the quality of the environment, this paper builded simultaneous equations model, and graphically shows the path of FDI impacting the industrial waste emissions. Through empirical analysis, we got conclusions such as, FDI effects environmental pollution through economies of scale, structure and technical effects in Guangdong Province .And FDI had negative scale effects on the industrial waste discharge, and structure effects, technology effects are positive. Overall, FDI does not deteriorate the environmental quality of Guangdong Province. On the contrary, FDI inflows will help to improve its environmental quality. However, FDI in different regions has different effects on the province's environmental .the use of FDI for the three largest cities using the most FDI get negative effects. Finally, according to the Guangdong Provincial environmental quality and the status of use of FDI, the relationship between FDI and environmental pollution, combining with the path of FDI affecting the quality of the environment, the fifth chapter put forward specific policy proposals from the scale, structure, effect, technical effect, and institutional factors respectively.