The Analysis Of The Environment Regulations Effects On FDI

In the process of economic development, foreign investment plays an important role. But with the entry of foreign capital, China's environmental problems become increasingly serious. To protect the environment, the Chinese government is improving the level of environmental regulation and environmental protection has been steadily progressing .With the increase in the level of environmental regulation, will affect the inflow of foreign capital, influence how much we need to look at. Jiangsu and Guangdong in particular, as the concentration of foreign direct investment (FDI) in China, to study the effect of environmental regulation on FDI become more significant.This study combined with theoretical and empirical, qualitative and quantitative methods, focus more on the application of measurement methods. This article includes the following elements: First, this research background, significance and literature review. Secondly, environmental regulation and the theory of FDI, including: the externality theory, foreign direct investment theory, and the pollution haven hypothesis and the Porter hypothesis. Third, the overall trend of foreign direct investment analysis, industry distribution analysis and regional distribution in Jiangsu and Guangdong provinces. Forth, the basic conditions of environmental regulation analysis, including environmental standards, environmental regulations, administrative rules, regulations promulgated and effectiveness of the Environmental Protection analysis. Fifth, the comparative analysis effect of Environmental Regulations on FDI based on the Jiangsu and Guangdong time series data. Sixth, the city-level panel data analysis based on data of Jiangsu and Guangdong province to examine the different effect on the FDI in different region. Seventh ,foreign investment and environmental policy proposals.Through this analysis, we get the following conclusions:First, through the analysis of FDI and environmental regulations of Jiangsu and Guangdong provinces, we found that FDI mainly concentrated in manufacturing. On the spatial distribution, we found more FDI concentrated in the southern Jiangsu Province and more FDI concentrated in the Pearl River Delta of Guangdong Province. From the environmental performance of view, better results in Jiangsu, Guangdong environmental protection needs to be improved. Sewage collection, Jiangsu Province in the total amount and the fee collection rate is higher than Guangdong.Second, according to the analysis of time series data, increase the level of environmental regulation would reduce the inflow of foreign direct investment. We found that the Guangdong Environmental Regulations on the impact of FDI is more apparent than in Jiangsu. That's to say FDI in Guangdong province higher sensitivity to environmental regulation.Third, through the integration and the Granger causality test, we found that foreign direct investment and long-term factors such as environmental regulation in a stable steady state. However, environmental regulation and foreign direct investment does not exist the Granger causality in Jiangsu. FDI in Guangdong Province is a Granger cause of environmental regulation. Forth, through the city level panel data analysis, we found that in Jiangsu province, Southern District of environmental regulations on foreign direct investment in a greater impact; Guangdong province, mountainous area of environmental regulations on foreign direct investment in a greater impact.Finally, based on the above analysis, the author proposed some suggestions about how to attack FDI and environmental protection.