ENVIRONMENTAL REGULATION AND FDI SPILLOVER EFFECT

By using the correlated data of 39 industries during 2000-2009 in China,this paper examined the horizontal,forward and backward spillover effects of the FDI,the impact of environmental regulation on industrial technological progress and the effect of environmental regulation on the marginal effect of FDI on industrial technological progress.The empirical results showed that horizontal spillover from FDI had no promotion effects on industrial technological progress,forward spillover from FDI had uneven promotion effects on industrial technological progress,backward spillover from FDI had significant promotion effects on industrial technological progress and the enhancing of environmental regulation intensity also had significant promotion effects on industrial technological progress.Further studies suggested that the enhancements of environmental regulation also facilitated FDI vertical spillovers in the long run.