The Study On The Impact Of Low-carbon Pilot Policies On Foreign Direct Investment

Since China joined the WTO in 2001,the degree of opening to the outside world has been further improved,which has prompted China to become one of the countries with the largest inflow of foreign direct investment.Especially in 2014,China surpassed the United States to become the largest inflow country of FDI in the world.The large-scale inflow of foreign direct investment has had a positive and far-reaching impact on China’s economic growth,technological progress and industrial promotion.However,it should be noted that while the entry of foreign capital has brought various positive effects to China,those foreign capital invested in low-efficiency polluting industries will also have an important impact on environmental pollution.At present,the Chinese government pays more and more attention to the coordinated development of economic growth and environmental protection.The China government has promised to reduce the carbon dioxide emissions per unit GDP by 40%-45%compared with 2005 by 2020,achieve peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060.In order to achieve this goal,China has set up low-carbon pilot provinces and cities in three batches,trying to promote the development of low-carbon economy,reduce environmental pollution and help high-quality economic development by establishing carbon financial market,low-carbon technological innovation and low-carbon industry development.The pilot policy of low-carbon cities is essentially an environmental regulation policy,and the relationship between environmental regulation and foreign direct investment has always been a hot topic at home and abroad.Therefore,it is of great theoretical significance and practical value to deeply explore the impact of pilot policies of low-carbon cities and FDI.Based on the balanced panel data of 257 prefecture-level cities from 2006 to 2020,this paper examines the impact of the implementation of pilot policies in low-carbon cities on foreign direct investment with the help of multi-time and double-difference empirical analysis,and examines the mechanism.Specifically,first of all,it preliminarily tests the effect of the implementation of the pilot policy of low-carbon cities on foreign direct investment;Secondly,the robustness of the benchmark regression results is tested by parallel trend test,tendency score matching,eliminating key cities and eliminating abnormal values.Then,taking into account the differences in the distribution of foreign capital in different regions,the differences in urban administrative levels and different batches of low-carbon city pilot policies,this paper makes relevant heterogeneity analysis;Finally,on the basis of benchmark regression,the indirect influence mechanism of low-carbon city pilot policy on foreign direct investment is tested.The research shows that: firstly,as a stricter comprehensive environmental regulation,the implementation of the pilot policy of low-carbon cities has significantly curbed the inflow of FDI in cities,reducing the actual use of foreign capital by 16.5% and the actual use of foreign capital per capita by 18.1%.After a number of robustness tests,this core conclusion still holds.Secondly,due to the differences in economic development,resource endowment and foreign investment in the eastern,central and western cities of China,the heterogeneity analysis shows that the implementation of the pilot policy of low-carbon cities has curbed the inflow of FDI in the eastern and central regions,but has no significant impact on FDI in the western region.At the same time,the implementation effect of the pilot policy of low-carbon cities also varies due to the differences in urban administrative levels,geographical distribution and batches.Thirdly,the mechanism test results show that the pilot policy of low-carbon cities will curb FDI inflow through environmental regulation effect and cost transmission mechanism.Based on the above research and the conclusion of empirical analysis,the corresponding countermeasures and suggestions are put forward.