Theoretical explanation and empirical test of the impact of foreign investment characteristics on environmental pollution in China

LIU Chenyue; MENG Xingtong

Abstract：Opening up to the outside world is an important feature and key driving factor of China's economic development in the new era.Therefore,in-depth exploration of how the characteristics of foreign direct investment under the background of opening up affect China's environmental pollution is an important way to solve the mystery of environmental pollution after China's accession to the World Trade Organization.This article starts with the environmental effects of heterogeneous foreign direct investment,and explores in depth whether there is a cross effect between the characteristics of foreign investment and the mechanism by which the quantity of foreign investment affects environmental pollution.The interaction term between foreign investment characteristics and related quantitative indicators is added to the regression model,and how foreign investment characteristics affect environmental pollution in China is studied from four aspects:industry bias,regional bias,scale bias,and technology bias.And introduce the scale of individual foreign investment and the technological content of foreign investment as threshold variables into the regression model to test whether the impact and significance of foreign investment characteristics on environmental pollution will be heterogeneous due to different external conditions.The research results found that:① The higher the proportion of foreign direct investment in polluting industries,the smaller the scale of individual investment by foreign-funded enterprises,and the lower the technological level of foreign investment,the less conducive it is to improving environmental pollution.However,the impact of the proportion of exports by foreign-funded enterprises on environmental pollution is not significant.② The scale of individual investment and foreign technology content of foreign-funded enterprises need to meet certain critical values due to the threshold effect in order to improve the environment.The conclusion of this article deepens the understanding of the external mechanisms of Chinese style environmental pollution,and provides theoretical support for improving the level of openness,optimizing the structure of foreign investment,and effectively controlling environmental pollution.