Environmental Regulations and the Location Choice of FDI in Pollution Intensive Industries: Evidence from China

摘要

As more foreign direct investment (FDI) inflows to pollution intensive industries in China, policy makers become concerned with the environmental problems causing by FDI. Because of environmental regulation in different regions can be formulated with different strength, whether or not environmental regulations in different regions can affect the location choice of FDI in China. Using the data of pollution intensive industries in 28 provinces, we examine the environmental regulation effects on the location choice of FDI (LOCFDI). Besides the regional total product volume and the area economic development level, the results also show that environmental regulation is one of the important determinants of LOCFDI. In some developed provinces, stricter environmental regulations have no effective influence on LOCFDI. While in other developing provinces, the environmental regulations have particularly significant effects on LOCFDI.