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Has foreign direct investment increased air pollution in China? A hierarchical linear model approach

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  • Xiang Cao

    (Hainan University
    Jinan University)

  • Ping Wang

    (Jinan University)

  • Bangzhu Zhu

    (Jinan University)

Abstract

Focusing on the mechanism of foreign direct investment on environment, we attempt to build a series of hierarchical linear models to explore the impact of foreign direct investment on China’s sulfur dioxide (SO2) emissions by using the panel data of industrial sector in Chinese provinces from 2002 to 2013. The findings show that: Firstly, the industrial SO2 emission shows a slow downward trend. Secondly, 27.96% of the variations of SO2 emission intensity come from the differences between the provinces. Thirdly, foreign direct investment can explain 50.50% of the different changes in provincial SO2 emission intensity due to economic scale effect, structural effect, technological effect, and environmental regulation effect. Among them, the scale effect and technical effect are negatively correlated with SO2 emissions intensity, while structural and environmental regulation effects positively. Moreover, foreign direct investment can significantly inhibit the positive correlation of structural effect and weaken the negative correlation of technology effect on SO2 emission intensity, but do not have a significant impact on SO2 emission intensity by economic scale effect and environmental regulation effect.

Suggested Citation

  • Xiang Cao & Ping Wang & Bangzhu Zhu, 2018. "Has foreign direct investment increased air pollution in China? A hierarchical linear model approach," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 91(2), pages 659-669, March.
    • Handle: RePEc:spr:nathaz:v:91:y:2018:i:2:d:10.1007_s11069-017-3148-0
    DOI: 10.1007/s11069-017-3148-0
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    References listed on IDEAS

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    Cited by:

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    3. Rui Pang & Minjun Shi & Dan Zheng, 2022. "Who comply better? The moderating role of firm heterogeneity on the performance of environmental regulation in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6302-6326, May.
    4. Ping Guo & Jin Li & Jinsong Kuang & Yifei Zhu & Renrui Xiao & Donghao Duan & Baocong Huang, 2022. "Low-Carbon Governance, Fiscal Decentralization and Sulfur Dioxide Emissions: Evidence from a Quasi-Experiment with Chinese Heavy Pollution Enterprises," Sustainability, MDPI, vol. 14(6), pages 1-24, March.
    5. Lan, Jing & Wei, Yiming & Guo, Jie & Li, Qiuming & Liu, Zhen, 2023. "The effect of green finance on industrial pollution emissions: Evidence from China," Resources Policy, Elsevier, vol. 80(C).
    6. Rui Pang & Dan Zheng & Minjun Shi, 2021. "Agglomeration externalities and the non‐linear performance of environmental regulation: Evidence from China," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1701-1731, September.
    7. Guanghui Tian & Jianming Miao & Changhong Miao & Yehua Dennis Wei & Dongyang Yang, 2022. "Interplay of Environmental Regulation and Local Protectionism in China," IJERPH, MDPI, vol. 19(10), pages 1-21, May.

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