Research On The Relationship Between Local Government Competition And Green Investment

From the economic development process of China’s reform and opening up for more than 40 years,it is undeniable that the extensive economic development model has indeed promoted the rapid development of China’s economy,but at the same time,it has also caused serious pollution to our environment,and even made our country once a "pollution paradise",causing great trouble to people’s lives,and the mode of economic development urgently needs transformation.President Xi once said that"we should not only have green mountains and silver mountains,but also green waters and green mountains".From this,it can be seen that the coordination of economic development and environmental protection has become an important issue to be solved urgently.China needs to change the extensive mode of economic development and realize green and healthy economic development.Green investment is an important way to realize green economy.To realize the green development of economy,it is necessary to increase the intensity of green investment.However,nowadays,due to the GDP oriented local government assessment mechanism,local governments have been carrying out "GDP arms race",blindly seeking for rapid economic expansion and ignoring environmental protection.In addition,as the main body of formulating environmental regulation policies,local governments influence enterprises’ green investment by introducing corresponding environmental policies.Then,how the intensity of local government competition affects the intensity of environmental regulation,and what role environmental regulation plays between local government competition and green investment,these problems need to be discussed and solved.Based on the previous literature,this paper studies the relationship between local government competition and green investment in 30 provinces(except Tibet,Hong Kong,Macao and Taiwan)based on the theory of fiscal decentralization,green investment theory and market failure theory,and studies environmental regulation as an intermediary variable and IFDI as a moderating variable The role of IFDI in local government competition and green investment and the regulatory role of IFDI in local government competition and green investment.Through the dynamic GMM method to build and verify the direct effect model,intermediary effect model,regulatory effect model and the mediating effect model of regulation,the conclusions are as follows:(1)the competition of local governments has a negative impact on green investment.Due to fiscal decentralization and the psychological expectation of"future generations’ governance",most of the investment will be used for infrastructure construction and environmental pollution control The investment in environmental prevention is less.(2)Local government competition has a negative impact on environmental regulation.In order to assess GDP,local governments form vicious competition.By reducing environmental regulations,such as environmental taxes and sewage charges,they attract foreign investment into the region and improve the economic development of the region.(3)The improvement of environmental regulation can restrain the negative effect of local government competition on green investment.(4)IFDI regulates the impact of local government competition on green investment.As a means of directly increasing GDP,local governments compete with each other in the process of introducing foreign capital.By giving more emission standards to attract capital into the region,IFDI inhibits the amount of green investment in the region.Therefore,the introduction of foreign direct investment will affect the effect of local government competition on green investment.(5)IFDI positively regulates the inhibitory effect of local government competition on green investment.Based on the above research conclusions,it can provide a new idea for decision makers to improve the assessment index of local officials,guide high-quality local competition behavior,strengthen the improvement of environmental quality,and promote green investment.From the previous research,most of the research on green investment is about the direct effect of environmental regulation on green investment,the research form and path are relatively single,and most of them are based on the enterprise level,and the research on the macro level is less.This paper studies the source of environmental regulation,from the perspective of local government competition,and takes environmental regulation as an intermediary variable,which enriches the research content and form.Based on the theory of fiscal decentralization,green investment theory and market failure theory,this paper discusses the deep-seated reasons behind the impact of green investment,and broadens the research perspective.However,this paper also has the following shortcomings:(1)the mediating effect of local government competition on environmental regulation may exist industry heterogeneity,because of the availability of data,there is no in-depth study.(2)The environmental regulation used in this paper is an overall dimension,and there is no subdivision of environmental regulation tools,which may lack of certain pertinence.