Does Environmental Regulation Affect The Difference Of FDI Distribution?

Opening to the outside world has long been a basic state policy of China.In the past,China relied on foreign investment to acquire advanced production technology and management philosophy,which promoted the development of domestic economy.The fifth plenary session of the 18th CPC central committee put forward the five development concepts of "innovation,coordination,green development,openness and sharing",putting openness and green development at the same level.In the new period of pursuing ecological civilization construction,it is necessary to put forward new requirements for environmental protection.So whether the increasingly strict environmental regulations will have an impact on China's foreign direct investment has become the research direction of many scholars.The earliest studies on the relationship between environmental regulation and FDI were mainly based on the "pollution heaven hypothesis".Scholars expanded this theory in various ways.In addition,the research on the impact of environmental regulations on FDI was also extended to the competition among local governments,forming the race to the bottom".Porter's theory of national competition is also used to explain why some studies do not support the "pollution heaven hypothesis" and regard environmental regulation as a means to stimulate innovation.In addition,previous studies on the impact of environmental regulations on FDI were mostly based on mean regressive analysis,without considering the differences in FDI distribution.In view of the above background,this paper deepens the research on the impact of environmental regulations on FDI,mainly adopts the method of empirical analysis to re-examine the impact of environmental regulations on FDI and its distribution and makes a certain contribution to the relevant research.There are three main contents in this paper:(1)the panel fixed effect regression model is built based on the inter-provincial panel data of China from 2004 to 2015.The empirical results show that China's environmental regulation has a significant positive impact on FDI inflow?but does not support the "pollution heaven hypothesis".(2)this paper adopts fixed effect panel again examine the environmental regulation quantile regression model for the influence of FDI in different sites,the results showed that:in 0.1 sites,environmental regulation,there is no significant impact on FDI,but on other sites,environmental regulation of FDI has a significant role in promoting,and with the improvement of quantiles,environmental regulation promoting effect of FDI is larger;(3)at the end of this paper,different decomposition methods were used to decompose mean and quantile regression respectively.The decomposition results of mean regression showed that environmental regulation contributed to FDI inequality to a certain extent,indicating that environmental regulation was an important factor affecting the difference in FDI distribution.The decomposition results of quantile regression show that the influence of environmental regulation on FDI difference decreases with the approach of quantile.Based on the above new findings,this paper puts forward policy Suggestions for China's environmental regulation and attracting foreign investment,hoping that the country can form a new situation of green and open common development under the background of ecological civilization construction.