A Research On The Influence Of Environmental Regulation Of Host Country On China’s OFDI

With the deep development of economic globalization, foreign direct investment (FDI) has become one of the indispensable means to promote China’s economic development.However, with the rapid growth of economy, the contradiction between economic development and ecological environment worsening, environmental pollution, climate change, energy crisis and shortage of resources to world economic development bottleneck restriction becomes severe, international capital flows, foreign direct investment, in particular, is seen as one of the main causes of ecological environment damage. In to realize the importance of environmental and economic sustainable development, countries have begun to establish environmental regulation system to control the negative externality of the environment.Thus, the impact of environmental regulation on FDI flows become the research focus in the economists at home and abroad.More than existing literature of environmental regulation in developed countries as a starting point to explore environmental regulation will lead to the change of FDI in the developed countries, but the host country environment regulation impact on developing countries OFDI research is still rare.In view of this, this article is based on relevant theories, using the 2003-2014 panel data of 65 Chinese foreign direct investment in host countries, build multivariate panel regression model, environmental regulation for the host country to study the influence of China’s OFDI.Specifically, the research content of this article can be mainly divided into the following six parts.The first chapter of this article research background, research significance, research methods and research ideas.The second chapter summarized and combing domestic and foreign research literature on environmental regulation effect on FDI, and a brief review.The third chapter combines the theory of foreign direct investment, environmental regulations affect FDI theories and develop the related theoretical model, to explore the mechanism of host country environmental regulation affect investor OFDI.The fourth chapter evolution and status quo of environmental regulation for the host country and the development of China’s foreign direct investment and the status quo analysis.In the first place in the fifth chapter to China’s foreign direct investment is as explained variable, at Yale university and Columbia University jointly issued the environmental performance index is established on the basis of the relative environmental regulation index as explanatory variables, to infrastructure, the degree of opening to the outside world, market size, economic stability, economic development level relative difference, the economic growth rate and distance as control variables. Second, the multicollinearity test, endogenous test and Hausman test, on the basis of constructing the appropriate multiple panel regression model to carry on the empirical analysis, finally makes a summary of empirical structure.The sixth chapter summarizes the main research conclusion of this article, and puts forward some targeted policy recommendations.Results show that:first, the host country environment regulation is related with its economic development, environmental regulation is different in different countries.Second, China’s foreign direct investment of industry distribution is not balanced, pollution intensive industry of relatively high;Regional distribution is not balanced, more focused on developing countries.Third, the host country the effects of environmental regulation on China’s OFDI is significantly negative, prove that environmental regulation is weak countries to attract foreign direct investment of China, at the same time also suggests that China’s environmental regulation is strengthened.Combined with theory, the present situation analysis and the empirical analysis results of this paper, the author put forward the policy Suggestions are as follows:choose the reasonable investment area, optimize the investment structure;The domestic industrial structure and industrial structure of foreign direct investment to link;To perfect our environmental regulation system, enhance the international competitiveness of enterprises.