The Impact Of Domestic Investment And Foreign Direct Investment On Environmental Pollution In Guangdong Province

In recent years,the contradiction between economic development andenvironmental protection is becoming more and more acute.As a major province for attracting investment and with strong economic strength,it is of great significance to study the impact of domestic investment and foreign direct investment onenvironmental pollution in Guangdong Province.Then we can interpret themechanism of environmental pollution formation from the perspective of domesticand foreign investment.In the analysis framework of Copeland and Taylor（2003）and Bin Sheng and Yue Lu（2012）,this paper derives a theoretical model includingeconomic scale effect,industrial structure effect,technical effect and environmental regulation effect.On this basis,this paper establishes a model containing fourdomestic environmental effects and four foreign environmental effects.Usingindustrial SO₂ emissions as environmental pollution indicators and panel data for 21cities in Guangdong Province from 2006 to 2016,the paper gain the estimation results that the domestic scale has negative effect.Meanwhile,technical effect andenvironmental regulation effect on environmental pollution in Guangdong Province are negative.However,the industrial structure effect is not significant.We canreasonably think that the increase of domestic investment has produced emission reduction effect.For foreign direct investment,the scale effect is negative,and the other three effects are positive.This supports the“pollution shelter”hypothesis to a certain extent.We can consider that the entry of foreign direct investment has apollution effect.In terms of industrial structure effects,a decrease in the proportion of industrial added value which led by the entry of foreign direct investment,will bring about emission reduction effects.Otherwise,the emission reduction effect brought by domestic investment exceeds the pollution brought by foreign direct investment inboth technical effects and environmental regulation effects.