Environmental Effect Of FDI On Host Country

It is uncontroversial that FDI drives economy so that most of developing countries keep encouraging the inflow of FDI,regarding it as a good way for economic growth.However,developing countries are confronted with environmental deterioration,amidst of economic development via capital,technology and management style brought in by FDI.As a result,FDI's environmental impact on hosting countries is drawing a lot of concern in the academic circle.Is FDI the cause of environmental deterioration in host countries;or is it playing a positive role in environmental improvement? In order to answer these questions,the paper studies into 5 Asian countries,which are prominent in attracting and using FDI.The research approach of this paper combines theory analysis and empirical test. First,related theories and studies are reviewed as a theoretical background;and then FDI's possible impact on host countries is discussed from a perspective of the developing model(so called 'East-Asia Model') of 5 countries;at last,a simultaneous system of 5 countries is established and tested using panel data.Through discussion on a perspective of economic developing model,we find out that for the 5 countries,the export-oriented strategy probably enhances FDI's consumption of resources and deterioration on environment,while the flying-geese industrial transfer may provides a track for transferring of polluting FDI.And the empirical result of simultaneous system indicates that:1) the five Asian countries are regarded as export-oriented production base by FDI;2) FDI has a negative impact on environment indirectly through scale effect and structural effect;3) the negative technological effect of FDI is making host countries "pollution heaven" for foreign direct investment.Based on the above analysis,the paper puts forward some corresponding countermeasures.