Study Of Fdi In Guangdong Province, Environmental Pollution And Environmental Regulation

In the tide of economic globalization, Foreign Direct investment from multinational corporations increased, this makes the research on the relations between FDI and environment problem one of the current hot topic. Based on studies of many abroad and home scholars, this paper makes a research on the effect that the FDI makes on the environment pollution, and environment regulation makes on the FDI in Guangdong province.Firstly, this paper analyzes on the status of attraction of FDI for Guangdong province and the role that FDI in the economic and social development, discusses the influence mechanism of FDI on the environment includes scale effects, composition effects, technology effects, then uses the OLS model test the relation between FDI and environment pollution. The conclusion is that, the FDI is negative to environment pollution in Guangdong. As the FDI increase, the pollution doesn't increases too. The scale effects increase pollution, but technology effects and structural effects of FDI are bigger than scale effects. FDI is not the fundamental cause of environment pollution, FDI inflows is benefits to improve the quality of the environment in Guangdong.Secondly, this paper researches the status quo of environmental regulation in Guangdong, and establishes a Model to analysis on the relation between FDI and environmental regulation, this context, adopting Linear Regression to estimate the relation, analyzing the long-term relation by the means of Cointegration test, and researching cause and effect between them. The conclusion is that, environmental regulation and FDI has a long-term relationship between the dynamic balances in Guangdong province, environmental regulations will affect FDI inflows, and the impact is negative. Strict environmental regulation does the Granger Cause FDI, but FDI does not the Granger Cause environmental regulation, FDI and environmental regulation does not both cause and effect relationship.Lastly, basing on the result of demonstration research and theory analyze on the relation between FDI and environment pollution, FDI and environment regulations, the paper gives some suggestion on the policy for the government when constituting the policy.