The Impact Of Foreign Capital Deregulation On The Environmental Performance Of Chinese Enterprises

With the continuous development of reform and opening up,China’s economy has developed rapidly,and its gross domestic product(GDP)has achieved a historic leap.While China’s economic scale has continued to expand,the pace of China’s integration with the global economy is also accelerating.Over the years,China has continuously adjusted its foreign investment access policy,pushing it to reform in a more relaxed and open direction,from the initial regional trial opening to the nationwide full opening,and then the implementation of the “market for technology” foreign investment policy,and then ushered in a period of policy adjustment.The current foreign investment policy adopted by China is a management system of former national treatment plus a negative list,which greatly decentralizes the approval authority.The inflow of FDI has brought many positive impacts to our country: firstly,it promotes the growth of our economy,secondly,it expands employment in our country,and thirdly,it brings many advanced technologies and management experience to our country.However,the occurrence of pollution incidents by foreign-funded enterprises such as Johnson Controls blood lead and the increasingly prominent environmental pollution problems have made people more and more concerned about the environmental problems caused by foreign direct investment.During the discussion,some scholars believe that in order to reduce the cost of pollution treatment,some developed countries take the initiative to transfer some highly polluting industries or sunset industries to countries with lower environmental treatment costs,which will adversely affect the environment of the host country.This is the famous The "pollution paradise hypothesis";some scholars believe that foreign enterprises may have higher environmental protection standards and environmental protection technologies than host country enterprises,and the high environmental protection standards of the home country will play an exemplary role in the host country.This is the "pollution halo hypothesis";some scholars believe that FDI is not conducive to FDI.The impact of the host country environment can be positive or negative,and the final result depends on the combined effect of different mechanisms.Therefore,based on the Porter hypothesis and the international production trade-off theory,this paper takes Chinese industrial enterprises from 1998 to 2013 as a sample,and focuses on the relationship between the relaxation of foreign capital controls and the environmental performance of Chinese enterprises to explore the relationship between the two.The possible mechanism of this study is to study in depth the moderating effect of absorptive capacity on the relationship between the two,and to study whether different sources of foreign capital and different ways of attracting foreign capital have a heterogeneous impact on the relationship between the relaxation of foreign capital controls and the environmental performance of Chinese enterprises.This paper uses the STATA17.0 data statistics software,uses the collected data to test the hypothesis,and at the same time verifies the two paths of green technology progress and emission reduction equipment investment.The final research conclusions are as follows:First,there is a significant positive correlation between the deregulation of foreign capital and the environmental performance of Chinese companies.If the industry in which the company is located belongs to an industry where foreign investment controls are relaxed,the company’s environmental pollution will be improved.This effect can be achieved through two paths of green technology advancement and emission reduction equipment investment,and by improving the company’s green Technology will bring better results.Second,firm absorptive capacity strengthens the negative relationship between deregulation of foreign capital and firm environmental performance.The empirical results show that the stronger the absorptive capacity of the enterprise,the more obvious the positive promotion effect of the relaxation of foreign capital control on the enterprise’s environmental performance.Third,different sources of foreign capital will have a different impact on the relationship between the relaxation of foreign capital controls and the environmental performance of enterprises.Foreign investment from Western countries will be more conducive to reducing pollution emissions of enterprises than foreign investment from Hong Kong,Macao and Taiwan.strength and improve the environmental condition of the enterprise.Fourth,the different ways of attracting foreign capital will have a different impact on the relationship between the relaxation of foreign capital controls and the environmental performance of enterprises.Compared with the way of attracting foreign capital through wholly foreign-owned enterprises,enterprises adopting the joint venture method can better improve the environmental performance of enterprises.