ENVIRONMENTAL REGULATION,FOREIGN DIRECT INVESTMENT AND "POLLUTION HAVEN" HYPOTHESIS
Xiangang Zeng
Abstract
Xiangang Zeng
Abstract
Based on the 1998-2008 China's 30 provinces panel data,a model is established to analyze the correlation mechanism between China's foreign direct investment,environmental regulation and other factors.The result shows that environmental regulation has certain negative influence on the influx of foreign direct investment,however,the influence is not significant.Comparatively,economic scale,infrastructure and the accumulation effect of investment have more significant influence on foreign direct investment.In addition,it was found that environmental regulation is not Granger-cause fluctuations in FDI inflows whereas FDI is not Granger-cause in environmental regulation.Hence,the proofs are not sufficient to support the pollution haven hypothesis for China.
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Based on the 1998-2008 China's 30 provinces panel data,a model is established to analyze the correlation mechanism between China's foreign direct investment,environmental regulation and other factors.The result shows that environmental regulation has certain negative influence on the influx of foreign direct investment,however,the influence is not significant.Comparatively,economic scale,infrastructure and the accumulation effect of investment have more significant influence on foreign direct investment.In addition,it was found that environmental regulation is not Granger-cause fluctuations in FDI inflows whereas FDI is not Granger-cause in environmental regulation.Hence,the proofs are not sufficient to support the pollution haven hypothesis for China.
Key concepts: Foreign direct investment, Haven, China, Environmental regulation, Pollution haven hypothesis, Environmental pollution, Economics, International economics