Foreign Direct Investment and Industrial Pollution

This paper structures a framework for analyzing the relationship between foreign direct investment and industrial based on transmission mechanism,using panel data of China's 30 provinces during the period from 1998 to 2005,and utilizing simultaneous equations and scene simulation to study the mechanism and its effect.The result shows that FDI has direct transmission mechanism of scale,structure and technology effect and indirect transmission mechanism of income and policy effect to influence industrial and increasing FDI may resuttin industrial to fall-off.Besides,industrial is indeed a factor which foreign industry enterprises look for.The hypothesis of pollution haven is exist,but,the technology of foreign industrial enterprise is always higher than domestic counterpart,FDI does has a technology spillover effect,newer technology means lower intensity,which implies foreign industry enterprise ought to present pollution intensity reversal.