Environmental Regulation And China's Outward Foreign Direct Investment

In recent years,under the overall decline of international foreign direct investment flows,China's foreign investment has remained at a high level.The continuous promotion of the "One Belt,One Road"initiative has provided a broader stage for Chinese enterprises to "go global".With its strong capital strength,China has become an important force that cannot be ignored in the world of investment.At the same time that Chinese enterprises have gone abroad on a large scale,the image of Chinese countries and enterprises has been greatly impaired due to the social defaults of individual enterprises in environmental protection.Under the background of the new era when environmental issues are widely valued and environmental regulations are becoming more and more strict in the world,this paper studies the impact of environmental regulation on Chinese enterprises' foreign investment from three aspects:home country factor,host country factor and enterprise factor.This study supplements the "pollution haven theory"with evidence from developing countries'foreign investment,deepens the understanding of China's foreign investment behavior and provides theoretical support for Chinese enterprises to better "go global.”The research in this paper is divided into two parts:the influence of the environmental regulation of the home country and the influence of the environmental regulation of the host country.Firstly,this paper constructs domestic environmental regulation variables based on three pollutants,and uses the sample data of Chinese overseas investment listed companies to study the impact of domestic environmental regulation on corporate overseas investment.Secondly,this paper uses the environmental regulation index to measure the level of environmental regulation of different countries.Based on the data of overseas investment enterpr:ises with a larger sample size,this paper studies the impact of host country environmental regulation on Chinese enterprises' overseas investment decisions.The conclusions of this paper are as follows:Strict domestic environmental regulation will increase the probability of Chinese enterprises investing overseas.Domestic enterprises'overseas investment has the motivation to evade domestic environmental regulation.Strict environmental regulation of the host country will reduce the investment probability of Chinese enterprises.Chinese enterprises are attracted by the loose environmental regulations of investment candidates.On the whole,the "pollution haven effect" exists in the process of selecting the location of overseas investment by Chinese companies.There are differences in the types of enterprises in the impact of environmental regulations on OFDI.Compared with other types of enterprises,pollution-intensive enterprises and capital-intensive enterprises are more sensitive to environmental regulation when they invest abroad,and are more attracted to loose environmental regulations;non-technically intensive firms exhibit stronger weaker environmental regulatory preferences,while technology-intensive firms respond less strongly to environmental regulation.Regarding the response of overseas investment state-owned enterprises and non-state-owned enterprises to environmental regulation,no evidence of significant differences has been found in this paper.Corporate socail responsibility and corporate scale have positive moderating effects on the main effects.Enterprises tend to invest in countries with weak environmental regulations,but this tendency decreases with the increase of corporate social responsibility and the size of the enterprise.There are national differences in the response of Chinese companies to environmental regulation.Compared with developed countries and the Belt and Road countries,developing countries and non-Belt and Road countries are more likely to become pollution haven for Chinese enterprises.Chinese companies are more inclined to invest in countries and regions where environmental regulations are loose and have a small distance from China's environmental regulations.Based on the above conclusions,this paper proposes policy recommendations as follows:deepen the adjustment of domestic industrial structure,optimize the international environment for Chinese enterprises to transnational operations,strengthen the supervision and management of overseas investment,attach importance to corporate social responsibility,and enhance the participation of enterprises in international affairs.