Research On The Impact Of Environmental Regulations On The Industry And Location Of My Country's Foreign Direct Investment

According to the economic growth,social development and people’s environmental awareness,China has increased its control over industrial pollution.In the Fifth Plenary Session,2015,the concept of green development and green GDP was put forward.This means that the environmental protection has been placed in a higher position in government work.However,same worrying as the scholar’s and entrepreneurs’,when enhance the pollution control,suddenly increased environmental standard will also increase the firm’s cost.Will it dampen the national economy growth and industrial development? Will it lead the foreign companies leave? If so,how big will the impact be? Put forward these questions are not to make excuses for pollution,or to use pollution permits to retain foreign investment,but to better understand the impact of environmental regulation on China’s macro economy and the possible impacts,and help decision makers to better develop strategies.The second part of this paper summarizes the domestic and international literature on the relation of environmental regulation and industrial migration,whether the migration is introverted or extroverted.We have found that the academia lacks a unified view on this issue,and there is still a gap in the study of Chinese issues.In the third part of this paper,we reviewed the development history of China’s foreign investment development and the related theoretical basis.After that,we proposed a possible connection between environmental regulation and foreign investment.We believe that environmental regulation should have an impact on corporate foreign investment,and this impact will change as the company’s own pollution intensity changes.In the fourth part,we reviewed the development of environmental protection in the world and in the China,and finally determine two indicators that can be used for quantitative analysis.In the fifth part,we discussed the interaction between China’s foreign investment and environmental regulation in 2004-2015.We find that the impact of environmental regulation on OFDI is not as significant as previously envisaged.Even in highly polluting industries such as mining and manufacturing,environmental regulation has not shown strong significance.In the sixth part,we discussed the difference of environmental regulation between China and other countries and its impact on the distribution of China foreign investment geographic distribution.We find that environmental regulation can greatly affect the geographic distribution of OFDI,and this effect is significant both for investment stocks and flows.This means companies that already have a motive for cross-border investment will consider the level of environmental regulation in the host country when choosing their investment destination.Combined with the fifth part of the study,we find that the improvement of China’s environmental regulation will not change the company’s foreign investment decision-making.That means,most of the Chinese enterprises will take the loss caused by environmental regulation,and will not try to avoid costs through foreign investment.But for those companies that have made decisions to invest abroad,the level of environmental regulation have significantly impact on their location decision.Finally,based on the analysis results,we put forward some policy recommendations such as aggressive environmental regulation standards may do more harm than good,environmental regulations can also be used to upgrade manufacturing,orderly guide enterprises green production.Moreoevr,we also provide opinions about environmental regulation and foreign investment.The main innovation of this paper is discussing policy regulation based on the industry of the enterprise.However,the shortcomings of this paper also come from this,because the sample size of industry data is small,it limited the robustness of this research.