Research On The Relation Between FDI?Industrial Structure And Air Pollution Emission Level In China

Since 2012,the haze phenomenon has appeared frequently in the vast area of China,and the problem of air pollution has become more and more serious.As air pollution is closely related to public health,personal life and work,the public is also beginning to worry and ask the source of air pollution.The rapid growth of China's national economy and the continuous progress of industrialization inevitably consume a lot of resources.The process of resource consumption also improves the air pollution emissions,and China's economic development is also facing enormous environmental pressure.If the total emission of air pollutants cannot be effectively controlled for a long time,the contradiction between economic development and environmental quality will become more and more acute.In developing countries,China has maintained the largest foreign capital scale for many years,the continued injection of FDI(foreign direct investment)promote the upgrading of our country to the development of the export trade and local enterprises in the technical and management level,it also stimulates the economic growth of our country.However,in the context of the increasing air pollution and the continuous decline of environmental quality,the impact of FDI on China's pollution and environmental quality has been paid more attention by scholars.There are two classic and opposite theoretical hypotheses in the academic circles:the "pollution halo" hypothesis and the "pollution heaven" hypothesis.The study of the impact of FDI on pollution emission and environmental quality in China has also led to a wide range of disputes in the academic circle:Is our country's continuous inflow of FDI,like the "pollute paradise" hypothesis,which has led to more air pollution and further environmental pressure?Or,as the "pollute halo" hypothesis suggests,reducing the air pollution and alleviating environmental pressure?Or both kinds of situations exist?The answer to this problem can help the government formulate reasonable policies to guide targeted FDI inflows,and achieve better emission reduction of air pollutants.At present,our country's gradually optimized industrial structure provides a favorable condition for more effective implementation of air pollution emission reduction.Therefore,how to make good use of the adjustment and optimization of industrial structure to reduce the effect of air pollution emissions and curb the growth of pollutant emissions and achieve sustainable development from the origin is an important issue facing the current economic development in China.At the present stage,the impact of the change of industrial structure on reducing pollution emission has become a wide focus that scholars are concerned about.Since 2015,the Chinese government has also formulated the emission reduction tasks and indicators to be completed from the perspective of industrial structure,with a view to promoting the reduction of air pollution emissions under the premise of maintaining growth.In view of this,this paper mainly discuss the relationship between FDI and industrial structure and the air pollution emissions in China's macro(provincial and prefecture level)and micro(industry)level.The spatial panel analysis,Bayesian spatial model selection,semi-parametric panel analysis,system GMM estimation,LMDI and other methods and techniques,STIRPAT theory,EKC theory,Modernization theory,general equilibrium model and Kaya equation are applied.All the data are collected from Chinese National Statistical Yearbook,Energy Statistics Yearbook,Environmental Statistics Yearbook,City Statistical Yearbook,Statistical Yearbook of Science,Technology and Industry as well as the statistical yearbook of China.The issues studied in this paper are:the effects of provincial FDI,industrial structure adjustment,urbanization and other economic factors on the atmospheric pollution emission in the long and short term;the influence of FDI,industrial structure adjustment and other factors on the industrial air pollution emission;the impacts of FDI,industrial scale,capital stock and industry tax rate on the air pollution emission level in the industry;the convergence of pollutant emission in different regions,industries and the effect of factors such as FDI and industrial structure on the convergence of emission level;regional and industrial differences in the pollutant discharge;decomposition and determination of the driving factors(economic structure effect and other factors)behind the emission of various pollutants.This paper draws the following conclusions through the analysis:First,at the provincial level,FDI has a positive effect on total sulfur dioxide emission(only in the short term),which is consistent with the "pollution heaven" hypothesis and has no obvious effect on total carbon dioxide emission.The adjustment and optimization of industrial structure can reduce the total sulfur dioxide emission in the long term and in the short term,but it has no obvious effect on carbon dioxide emission.The process of urbanization reduces these two air pollution emissions both in the long run and in the short term.Besides,factors as industrial structure and urbanization also exert spatial spillover environmental effect.Second,at the prefecture level,the eastern and high industrial output areas are more conducive to FDI's advanced demonstration effect and technological spillover because of the higher level of economic,social development and advanced management.Therefore,FDI has a negative correlation with the industrial pollution emission,which is in line with the"pollution halo" hypothesis.In addition,the market in the eastern and higher industrial output areas is more developed,and the high-class market demand has significant environmental effects on the industrial structure.Therefore,decline in the proportion of the second industry in these areas can significantly reduce the industrial pollution emissions.The population in the eastern and industrial developed areas is more densely,so the population factor also has a significant positive impact on the level of industrial air pollution emissions in the eastern region and the high industrial output area.Third,at the micro level(the industrial sector),FDI can reduce the air pollution emission in the industrial sector,that is,the inflow of foreign capital has a significant"demonstration effect" on industrial pollution control,so the "pollution halo" hypothesis is also watertight for the industrial sector.The relationship between the scale of industrial industry and the emission of pollutant may be in the decline stage of the U shaped EKC curve,that is,the "technological effect" and "structural effect" associated with industrial growth have greater impact on the industrial environment than the "scale effect".There is a positive correlation between the per capita stock of industry capital and the industrial pollution.Industry tax rate and R&D intensity have a negative impact on the pollution of the industrial sector,that is,the cost of taxation as a production cost limits the emission.If the advanced technology brought by R&D can be reduced,air pollution emission will decrease.Fourth,the trend of absolute beta convergence and conditional beta convergence is not true for the air pollution emission(total sulfur dioxide and carbon dioxide emissions).But a number of economic factors affect the rate of change in emission levels:Upgrading and optimization of industrial structure in a region reduce the rate of change of local air pollution emissions,but increase the rate of sulfur dioxide emissions in the adjacent area.The influx of FDI can reduce the rate of change of SO2 emission in adjacent area.The process of urbanization can reduce the rate of sulfur dioxide emission change in the local and adjacent areas.Energy intensity only affects the local and adjacent areas of carbon emission rate;it has no significant effect on sulfur dioxide emission;The increase of personal income reduces the adjacent carbon emission rate,but does not affect the local carbon emission rate.The local carbon emission is only related to the change rate of carbon emission in neighboring provinces.Sulfur dioxide emission is only related to their own(local)emission rate.These findings illustrate the existence of the difference between air pollution emission and economic development in China.The difference between the two kinds of pollutants in the whole country is unlikely to be eliminated with the development of economy.Fifth,the industrial air pollution level shows absolute ? convergence in the eastern region,showing only absolute ? convergence trend in the central region and the whole country,but not significant.The central area and the whole industrial air pollution emission level has conditional ? convergence,and the convergence speed of China's regions shows the pattern from east to central and then to the whole country.The changes in industrial scale,FDI and the proportion of the second industry play a role in the convergence of the whole national emission of industrial air pollution.Factors that affect the rate of variation in different regions are different:There is no absolute and conditional ? convergence in the air pollution emission level in industrial sector.FDI has no effect on the industry's emissions rate,but per capita industrial output,R&D intensity and per capita capital stock have impacts on the change rate of emissions.Sixth,the difference of sulfur dioxide emission level is ranked in the East,the West and the middle.The difference in the carbon dioxide emissions also shows the pattern of the East,the West and the middle.The difference between these two emissions shows a fluctuation in different years.This shows that the emissions and the structure of the economy have been changing in all regions.The difference in their emission levels comes from the differences between the provinces within each region,not from the differences between different regions.Seventh,the difference of industrial air pollution emission in the western regional cities is the largest in most of the years,the smallest is in the middle area and the middle in the East.The difference in industrial emission level among cities in various regions are the main components of the national emission difference.The industrial emission varies with time,which means that the internal structure of industries in different regions has also changed.The difference of atmospheric pollution level among industrial industries is mainly composed of high emission and low emission industries.Last,in recent years,the per capita emission of all kinds of air pollutants has risen.The main reason behind this is the scale effect of economic development.The structural effects of economic development have different effects on different kind of emissions.This shows that the economic/industrial structural factors have different effects on different emissions.Technological effects related to economic development always play a role in slowing down the rise of pollutant emissions,but its effect is always smaller than the scale effect,so it can not reverse the upward trend.The potential innovations in this article are listed below:First,this paper,for the first time,applies dynamic spatial panel analysis to analyze the air pollution emission with simultaneously controlling for emission's spatial and time series correlations.It has two advantages.On the one hand,it relaxes the assumption:air pollution on provinces are independent and there is no autocorrelation,which makes the analysis of the problem closer to reality.On the other hand,the economic factors5 short-term and long-term direct effects and indirect effects on environment can be estimated.The empirical results in the second chapter show that the relationship between FDI and SO2 emissions in the short term is consistent with the theory of "pollution paradise".The optimization and upgrade of industrial structure and the process of urbanization can reduce the air pollution emissions in both short run and long term.In addition,there is a cumulative effect on air pollution emission.These points have not been discussed and discovered in the past and the existing literature of the same kind.Second,in the third chapter,semi-parametric panel regression analysis is applied for study of industrial air pollution and data is classified according to its heterogeneity of the samples.In this way,the influence of FDI and industrial structure on the industrial air pollution emissions at the prefecture level is studied and discussed.So,there is no need to deal with the nonlinear relationship between industrial pollution emissions and industrial output values,which can also generate more reliable results.Besides,this chapter also analyzes the industry's emissions decisions by establishing a general equilibrium model.Based on this model,the systematic GMM regression is applied for the analysis of FDI and other economic factors' environmental effects.Therefore endogenous issue that may arise in the model is not problematic anymore.The conclusion of the chapter holds that the impact of China's FDI and industrial structure on the industrial air pollution emissions is characterized by regional characteristics and these two factors have impacts on the emissions in the developed(east)regions and the higher industrial development regions.FDI plays a role of "pollution halo" in the whole country,the East,the high industrial output value and low emission intensity areas,and the industrial structure factor has impacts on the emission in the eastern,central,high industrial output and high emission intensity areas.These findings have not been involved in the same literature.Third,the fourth chapter adopted the Bayes method to find the best spatial model and weight matrix specification,so as to explore the convergence of air pollutant emission.Bayesian spatial model selection has not been used in environmental economic research.By analyzing the Bayesian posterior probability,the optimal model and the spatial weight matrix can be determined.It can deal with the issue of analyzing the spatial weight matrix and the spatial econometric model selection at the same time,which has never been solved in similar literatures.The result of this chapter holds that the spatial weight matrix of the first order/the four order centroid and the SLX model is the best combination.This indicates that the influence of various economic factors on the convergence or convergence rate of air pollutant emission is only limited to neighboring areas,but not to distant areas.The existing literatures have not discussed about this.