The Impact Of Environmental Regulation On The Location Of Inward FDI In Shandong Province

In recent years, with the Chinese economy growing strongly and the deepening ofeconomic globalization, more and more foreign direct investment flows into China andbecomes a significant factor in stimulating its economic growth. As the same time,environmental issues in China become increasingly serious. It must be realized that theenvironment and economy development are not antagonists but complement to each other.We should not develop our economy solely at the cost of the environment.According to conventional theories of foreign direct investment, many factors canaffect its location choices, such as the host country’s natural resource, labor, infrastructureand its economic development. Of all these factors, environmental regulation is a new onebeing concerned about. So relevant research that cast new light on the causes of itsunbalanced distribution and location choices are instructive. This paper attempts to make adetailed analysis of FDI’s location choices and its relationship with environmentalregulation in Shandong province based on relevant theories.This paper attempts to make a comprehensive utilization of such researchmethodology as literature survey, positive economics and case study. It reaches theconclusion about whether environmental regulation is an effective factor when FDI makesit’s location choices in Shandong, China.Based on the above analysis, the author forwards constructive proposals about how todevelop foreign direct investment in harmony with environmental regulation in Shandongin four aspects: industry, policy, public, enterprise.