The Analysis Of Impact Of Environmental Regulation On FDI Of Pollution Intensive Industries In China

In recent years, there are more and more foreign direct investment coming into China and bringing a lot of financial support and technical support. However, the investment of FDI in China’s pollution intensive industry is showing a growing trend. As a result, the problem of environmental pollution in China is more and more serious. At the same time,a series of environmental regulation measures have been made by China to manage the investment of FDI in pollution intensive industry in order to improve the quality of investment and promote the object of sustainable economic development. So, it has important theoretical significance and practical value to research the impact of environmental regulation on FDI of pollution intensive industries.Firstly, based on the related concepts of environmental regulation and FDI in pollution intensive industries, the paper analysis the situation of environmental regulation and FDI in pollution intensive industries. Secondly,the paper studies the impact of environmental regulation on FDI entrance, the choice of location and distribution of industries, and regard environmental regulation as explanatory variables, regard FDI of pollution intensive industries as explained variables, regard the ratio of profits to total industrial costs,GDP,economic development level and industry scale as control variables. And, the paper builds a measurement model. Then, the paper makes empirical analysis of the three models on the impact of environmental regulation on entrance, choice of location and distribution of industries on FDI in pollution intensive industries. The result shows that with the strength of environmental regulation, the entrance of FDI of pollution intensive industries will reduce;when the environmental regulation is more strict, the effect of FDI in pollution intensive industry on the the choice of location is more serious ; environmental regulation influences the foreign enterprises’ share in China’s pollution intensive industries. Finally,the paper proposes how to improve the strategy of our environmental regulation on FDI in pollution intensive industries on positive effect. The strategies of government includes the increase of establishment of environmental regulation legal system, the increase of supervision of government environmental regulation, increase of establishment of FDI in pollution intensive industry , and the increase on strategy of quantity of FDI in pollution intensive industry. The strategies of industry include the adjustment of industrial structure, increase of investment in funds of environmental protection in pollution intensive industry, and promotion of pollution intensive industry to environmental industry.