The Impact Of Russian Environmental Regulation On Chinese Direct Investment In Russia

Since China and Russia established the “friendly country” relationship in 1992,the relationship between the two countries has become increasingly close with the increase of trade exchanges year by year.In 2019,the two countries have become“comprehensive strategic partnership of coordination between China and Russia in the new era”.With the continuous expansion of the fields and levels of cooperation between the two countries,the negative effects of environmental issues on bilateral cooperation have attracted the attention of the two countries.From the perspective of one country,this paper explores the impact of the intensity of environmental regulation in different periods from 2008 to 2018 on China’s direct investment in Russia.Taking the situation of China’s direct investment in Russia as the object of this study,taking the stock of China’s direct investment in Russia distributed in 13 industries as a sample,selecting a more comprehensive environmental performance index as the proxy index to measure the intensity of environmental regulation,using the fixed response model to study the impact of Russian environmental regulation intensity on China’s direct investment in Russia,for the sake of Chinese government The government and enterprises provide theoretical basis for the decision of investment in Russia.From the empirical results,we can see that the intensity of environmental regulation in Russia significantly restrains China’s direct investment in Russia,which has an effect on both pollution-based industries and clean industries,and the effect is stronger in pollution-based industries.In addition,other economic characteristics of Russia,such as resource and energy endowment,technology level factors have significant incentive effect on China’s direct investment in Russia,while the level of economic development,human capital and market scale significantly inhibit the scale of China’s direct investment in Russia.At the same time,the empirical results confirm that the “pollution heaven hypothesis” exists to some extent in the process of China’s direct investment in Russia.The results of this study have certain policy implications.For China,when investing in various industries in Russia,the negative impact of environmental regulations needs to gradually cause the risk prevention of Chinese investors.The two governments should also pay more attention to and negotiate the formulation and implementation of environmental policies.According to the conclusion of the study,this paper believes that we can deepen the economic and trade cooperation between the two countries and promote the sustained and steady development of economic and trade cooperation between the two countries from four aspects: choosing a reasonable investment industry,promoting“green investment”,setting up a special investment development fund for clean industries,and strengthening the exchange of environmental policies.