Does Foreign Direct Investment Harm the Host Country’s Environment? Evidence from China

Spatial Econometric Model Analysis of Foreign Direct Investment and Haze Pollution in China

“…Other studies, however, do not support the PHH, but support the idea that FDI helps decrease environmental pollution [17,18] -the so-called pollution halo hypothesis proposed by Walter and Ugelow (1979) [19]. Researchers such as Birdsall and Wheeler (1993) argue that the more open a country is, the more likely it is to attract cleaner industries.…”

China's Dilemma: Economic Growth, the Environment and Climate Change

“…7 Some authors, such as Wang and Jin (2002) and Liang (2006), empirically find a negative effect of foreign investment on pollution emissions in China. Similarly, we also estimate the linear…”

“…Although it has been found (Wang and Jin 2002;He 2002;Liang 2006) that foreign investment generally helps to reduce China's pollution emissions, the environmental effect of FDI varies significantly between different regions in China, as shown in Table 11.2. While the eastern region has accounted for a much larger share of FDI than other regions in the past due to its geographical location and its infrastructure facility advantage, provinces in the eastern region have not performed much better than those in other regions in terms of environmental protection.…”

Impact of FDI on Environmental Quality of China

“…Further, the level of water and air pollution is also significant to assess the environmental quality. Towards this, a negative relation between air pollution and FDI inflow (Liang, 2006) and negative association of overall pollution level and FDI (Yang and Wang, 2016) both are prevalent in existing literature. Further, Adi and Adimani (2014) suggested FDI in primary and secondary industries are majorly responsible for increasing pollution.…”

“…With the development of technology, both developing and non-developing nations tends adopt new technologies to attain clean and green environment and sustainable growth levels. Further, FDI-led output generation is said to have positive effects on local environment and is controlled for industrial output and composition, however, FDI has measurable impacts on air pollution (Liang, 2006). Lastly, Wan-Ping et al (2008) suggested the technology spillover to be the rationale behind increasing adoption of environment friendly policies through FDI and increasing investment in primary and secondary industries are reason explaining for growing levels of pollution.…”