A Research On Environmental Effects Of Foreign Direct Investment

Economic development of a country determines its long-term economic strength. Economic development and growth of the country is increasingly becoming the focus of attention. China, as the world's largest developing country in the past few decades, economic development has made remarkable achievements, and foreign direct investment in China is an important engine of economic growth. Foreign direct investment refers to foreign investors to invest in our country through the establishment of foreign-invested enterprises, partnerships, branches of foreign companies and other means. In the beginning of Reform and Opening up to attract foreign direct investment, market-oriented economic reforms in China gradually became one of the most attractive countries for foreign direct investment. On the other hand, with the deepening of the process of industrialization, excessive consumption of natural resources, increasing environmental pollution and ecological destruction gradually, a lot of problems of global environment. With economic development, China's environmental issues have become one of today's development needs must be addressed.As the impact of economic development on the public pay more attention to the environment, people began to be concerned about what kind of foreign direct investment on China's environmental performance. In accordance with the "pollution haven hypothesis" point of view, exacerbated by China's environmental pollution situation? Or in accordance with the "Environmental halo hypothesis" that improve our environmental performance? Therefore, this article through the establishment of provincial panel data model, not only can examine environmental performance of FDI in the country, can also be a comparative study of the eastern, central and western analysis. From a practical point of view, a clear understanding of the relationship between foreign direct investment and the environment can promote the healthy, rapid and stable development of China's economy.In this paper, we discuss the problem of environmental performance of FDI in China on the basis of the relevant literature. Then select three effects model from three aspects to analyze the mechanism of foreign direct investment on China's environmental pollution. Then the current situation of foreign direct investment and environmental pollution in our country will be described. Then construct theoretical models based on previous theoretical analysis. Finally, summarize and make recommendations.In the country as a whole, the environmental impact of FDI inverted U-shaped curve distribution. Environmental pollution accompanying economic growth tends to decline after the first tends to rise. In terms of industrial wastewater is now in the left side of the inverted U-shaped stage and the opposite situation with the industrial sulfur dioxide emissions. With the increase of foreign direct investment, China's water pollution problems will be improved. FDI has brought negative environmental effects to China's industrial sulfur dioxide emissions. Impact of Foreign Direct Investment in the eastern part of the sewage generated negative environmental effects in line with pollution haven hypothesis, while industrial sulfur dioxide emissions inverted U-shaped relationship, and has been in the right side of the stage. Impact of Foreign Direct Investment in the center part of the industrial sulfur dioxide emissions negative environmental effects in line with pollution haven hypothesis, while sewage generated inverted U-shaped relationship, and has been in the left side of the stage. Impact of Foreign Direct Investment in the western part are both inverted U-shaped curve distribution and both in the left side.The empirical results show that compared to water pollution, pollution of the atmospheric resources more difficult to control. It is difficult to change with external investment, technological improvements and supervision situation changes. China is still not in a technological-intensive industrial structure, is still a labor-intensive industry for production. Because of its early development of the eastern region so that the pollution is relatively good. Due to foreign investment in central and western regions started late and the local people's environmental awareness, these two regions relatively poor and need to be resolved as soon as possible.Compared with other studies of the environmental performance of FDI, this paper has the following characteristics.1. Join FDI squared terms when paper constructs panel data model, not only can examine the correlation of foreign direct investment and environmental performance but also can be further analyzing the specific distribution of foreign direct investment on the bad environmental pollution emissions curve, as well as the current national and regional location.2. From these two aspects of the national and regional analysis of foreign direct investment in environmental performance and then compared the results. The introduction of elastic analysis can be developed to attract foreign investment policy and environmental policy to provide more targeted reference for local.3. Selected indicators of environmental supervision for a more comprehensive analysis of the provincial and municipal environmental quality factors, taking into account the different supervision between provinces, avoiding the good quality of the environment due to too much foreign direct investment, the result of more realistic and effective.There are some shortcomings in this paper as following.1. Because of the environmental aspects of statistical work started late and the statistical data is not comprehensive enough particularly the emissions of industrial pollutants and the amount of processing, we use a more macro data of industrial wastewater and industrial emissions of sulfur dioxide, there may be some bias.2. Since the level of research and articles of limited space, only the country's 30 provinces and regions in general have been studied, no more detailed studies, such as the environmental impact of different source of foreign direct investment to different sectors of industry, foreign direct investment environmental performance and other analysis and comparison, in the future as more in-depth research.