Foreign Capital Policy,Industrial Chain Spillover And Firm Pollution Effect

Over the past 40 years of reform and opening up,China has been committed to attracting large-scale foreign capital inflows and has introduced a series of relevant preferential policies to this end.In 2021,China’s actual use of foreign investment reached a record high,and maintained a steady growth trend in 2022,reaching an order of magnitude of 1.2 trillion yuan.However,the great achievements of China’s industrialization and urbanization process have put great pressure on the environment,especially in terms of industrial pollution emissions.According to the annual monitoring report released by the China Environmental Monitoring Administration,the proportion of industrial pollution emissions in the "three wastes" has remained high over the years,especially in the exhaust and solid waste emissions,industrial pollution emissions accounted for more than 70%,and enterprises are the main source of pollution emissions.In order to alleviate environmental problems,the government has strengthened the formulation of environmental regulation policies and the construction of environmental governance system in recent years.However,one shortcoming of existing studies on the impact of FDI on Chinese enterprises is that many literatures use national economic data to empirically verify the pollution haven hypothesis.In addition,Most studies are conducted on industry level or provincial panel data,which makes it impossible for these studies to conduct a more in-depth analysis on the micro-mechanism of FDI affecting pollutant emission of Chinese enterprises.At the same time,because OFDI is a relatively complex internal decision of enterprises,its effect on pollutant emission of enterprises in host countries is affected by many factors.In this context,this paper starts from the perspective of Chinese micro enterprises.The core issue of concern is how the impact of the relaxation of foreign investment access policy affects the pollutant emission of local enterprises,and further discusses how the micro mechanism of its influence is formed.Starting from the perspective of the adjustment of foreign investment access policy in 2002,Using the Chinese industrial enterprise database and the enterprise pollutant discharge database from 1998 to 2007,this paper evaluates the influence of foreign investment policies on the pollution discharge of local enterprises in China by using the identification strategy of differential method and instrumental variable method.The research of this paper finds that the degree of relaxation of foreign investment policy significantly promotes the market entry of foreign enterprises,thus reducing the pollution emission per unit output of Chinese local enterprises.The technology spillover effect brought by the relaxation of foreign investment access policy is significantly greater than the competition effect.After taking into account core variable remeasurement,other policy influences during the window period,and sample selection,the results of this paper remain robust.From the perspective of the types of foreign direct investment,this paper further examines the transmission mechanism and heterogeneity of environmental effects under the impact of the relaxation of foreign investment access policy.The research of this paper shows that: from the perspective of FDI type,the technology spillover effect of vertical FDI on pollution emission of local enterprises plays a dominant role,especially the downstream FDI exerts a greater restraint on pollution emission of local enterprises,while the horizontal FDI has a greater influence on product competition effect on pollution emission of local enterprises.Finally,from the perspective of relaxing foreign investment access policy and further opening up industrial capital,this paper provides important policy enlightenment for realizing energy conservation and emission reduction of enterprises from three aspects:focusing on improving the quality of foreign investment,attaching importance to foreign direct introduction and supporting the industrial chain,and focusing on guiding enterprises to improve their absorption capacity and R&D investment.