The Impact Of Foreign Direct Investment And Environmental Regulation On Haze Pollution In China

Since reforming and opening-up,China has absorbed a lots of foreign direct investments which play an important role in promoting economic development.At the same time,the environmental pollution caused by foreign investment can not be ignored.In recent years,the emerging of haze pollution in China,which has seriously affected people’s quality of life.People have also seriously concerned about the current situation of haze pollution and call on the government to take effective measures to improve air quality.The Ministry of Ecology and Environment decided to implement the Air Environmental Quality Standard(2012).The Air Environmental Quality Standard(2012)will improve air environment monitoring technology and standards,such as introducing PM2.5 concentration data into the air environment monitoring system and making it available to the public on time.This paper explores the impact of the implementation of Air Environmental Quality Standards(2012)on haze pollution in China.It bases on panel data of 285 cities from year 2001 to year 2016 in China and adopts fixed model.It also analyzes the intermediary effect of foreign direct investment on urban PM2.5concentration after the implementation of the Air Environmental Quality Standard(2012).Overall,the author finds that the air quality standard can significantly reducing local PM2.5 concentrations by inhibiting foreign direct investment and improving local environmental air quality.That shows that the Air Environmental Quality Standard(2012)is effective.After controlling for other exogenous variables,the conclusions of this paper are not changed.In addition,considering the heterogeneity of urban areas in China,this paper divides Chinese cities into three regions,including eastern,middle and western regions.By conducting regression respectively to explore the spatial heterogeneity of the influence of foreign direct investment on PM2.5 concentration in air quality standard.The results show that air quality standard has heterogeneous effect on PM2.5concentration in the eastern,middle and western regions by mediating effect of foreign direct investment.The Air Environmental Quality Standard(2012)has played a positive role in haze governance and the effect varies in different regions.Next,this paper advances the policy implementation year for two years and conducts a placebo test.The test show that the empirical results are robust and reliable.According to the empirical results,author puts forward relevant policy recommendations.There recommendations are as follows.Firstly,the local government should adjust the industrial structure and promotes industrial upgrading.The city should rationally guide regional and industrial distribution of foreign capital.The local government must strengthen the supervision of foreign investment and introduce green foreign investment.It also should strengthen enforcement of environmental protection and effectively implement environmental policies.The innovation of this paper is that the policy of Air Environmental Quality Standards(2012)is used for the first time to investigate its influence on haze pollution and foreign direct investment is introduced to further explore its influence mechanism.