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Economies 2017, 5(1), 8; doi:10.3390/economies5010008

The Impact of Foreign Direct Investment (FDI) on the Environment: Market Perspectives and Evidence from China

1
School of Business, Henan University, Kaifeng 475004, China
2
School of Economic, Henan University, Kaifeng 475004, China
*
Author to whom correspondence should be addressed.
Academic Editor: Eric Rougier
Received: 11 October 2016 / Revised: 26 February 2017 / Accepted: 28 February 2017 / Published: 6 March 2017
(This article belongs to the Special Issue FDI and Development: Emerging Issues)
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Abstract

Foreign direct investment (FDI) may have a positive effect on the level of pollution in host countries, as described by the pollution haven hypothesis (PHH). However, this kind of effect may depend on the economic conditions in host countries. In this study, we conduct research on the FDI’s effect on China’s CO2 emissions during the market-oriented reform. The results are as follows. Firstly, FDI directly promotes China’s CO2 emissions. Secondly, with market-oriented reform, this positive effect from FDI is lowering year by year, which indicates that the market-oriented reform could alleviate the positive effect of FDI on China’s CO2 emissions. Thirdly, as China’s market-oriented reform was implemented gradually from experimental zones to the whole country, regional market development is uneven, and as such so is FDI’s effect on local CO2 emissions. Provinces in the eastern area generally evidenced higher market development and lower CO2 emissions from FDI, while four provinces in west area evidenced both lower market development and higher CO2 emissions from FDI. View Full-Text
Keywords: FDI; market-oriented reform; CO2 emissions per capita; CO2 emission intensity FDI; market-oriented reform; CO2 emissions per capita; CO2 emission intensity
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Zheng, J.; Sheng, P. The Impact of Foreign Direct Investment (FDI) on the Environment: Market Perspectives and Evidence from China. Economies 2017, 5, 8.

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