Foreign Direct Investments and the Environmental Kuznets Curve: New Evidence from Chinese Provinces

By employing a panel smooth transition regression (PSTR), this article analyzes the impacts of economic growth and foreign direct investment (FDI) on air pollutant emissions. The results reveal the regime-switching effects in the income-pollution relationship as well. Specifically, an inverted-U shape is found in the relationship between per capita income and two air pollutant emissions, soot and dust, which confirms the environmental Kuznets curve (EKC) hypothesis. Significant influence of FDI on EKC relationships is found, which provides the evidence that the pollution haven hypothesis holds to some extent.