Research On The Impact Of Environmental Regulation Of Host Country On Foreign Direct Investment

With the development of society,human living standards have been greatly improved.As a by-product of economic development,environmental pollution has been neglected for a long time.In modern times,the frequent occurrence of global warming and extreme weather has made environmental issues no longer only affect individual countries.The coordination between economic development and ecological environmental protection has received high attention from the international community.Countries have generally begun to attach importance to environmental pollution issues and gradually improve their environmental regulations.With the increasing attention paid to environmental pollution,environmental regulation has gradually become an important influencing factor to be considered in international investment.However,there has always been controversy about the effect of environmental regulation on international investment.There are two diametrically different viewpoints,namely,the "Porter Hypothesis" and the "Pollution Shelter Hypothesis".Relevant academic research on how environmental regulation affects international investment needs to be further expanded.Based on the above research background,this article aims to explore the impact of environmental regulations on foreign direct investment in host countries.Based on the theories of foreign direct investment motivation and international investment effects of environmental regulations,foreign direct investment is divided into different motivations,and the impact of environmental regulations in host countries on foreign direct investment under different motivations is studied.Relevant assumptions are proposed,Analyze the impact of changes in domestic environmental regulation levels on foreign direct investment in host countries with different resource endowments.Based on panel data from 80 countries around the world from 2006 to 2020,this paper empirically tests the impact of host country environmental regulations on foreign direct investment using a two-way fixed effect model,and verifies the "Porter hypothesis" and the "Pollution Shelter hypothesis".The results show that the improvement of environmental regulations in host countries has a significant promoting effect on foreign direct investment;The improvement of environmental regulations in host countries has a significant inhibitory effect on foreign direct investment motivated by natural resource seeking,while the improvement of environmental regulations in countries with abundant natural resources has a inhibitory effect on attracting foreign direct investment.The research conclusions support the "pollution shelter hypothesis";The improvement of environmental regulations in host countries has a significant promoting effect on foreign direct investment motivated by science and technology.The improvement of environmental regulations in countries with strong scientific research capabilities has a promoting effect on attracting foreign direct investment.The research conclusions support the "Porter hypothesis";However,the improvement of environmental regulations in the host country has no significant impact on the market seeking motivation of foreign direct investment.Finally,based on the results of theoretical and empirical analysis,relevant policy recommendations are proposed.