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Impact of Regional Environmental Regulations on Taiwanese Investment in Mainland China

Graduate Institute for Taiwan Studies, Xiamen University, Xiamen 361005, China
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Academic Editors: Marc A. Rosen, Roberto Zoboli, Massimiliano Mazzanti and Simone Tagliapietra
Sustainability 2021, 13(8), 4134; https://doi.org/10.3390/su13084134
Received: 15 December 2020 / Revised: 23 March 2021 / Accepted: 28 March 2021 / Published: 8 April 2021
(This article belongs to the Special Issue Economic Policies for the Sustainability Transition)
Based on the perspective of regional differences and decentralization, this article investigated the impact of environmental regulations on Taiwanese investment in mainland China from theoretical and empirical perspectives, and analyzed whether local governments are competing to lower environmental standards to attract Taiwanese investment so as to maintain their comparative advantages. This paper constructed a theoretical model through a two-stage game model. With the panel data of each province in Mainland China from 2006 to 2016, the theoretical propositions were empirically tested through the system GMM estimation method. The results show that the environmental regulation policies adopted by the local governments in the mainland have a significant inhibitory effect on the investment volume of Taiwan-funded enterprises, and the interaction between environmental regulations and local tax burden levels also has a negative effect on Taiwanese investment. Local governments have the motive to reduce environmental regulations to attract investment. View Full-Text
Keywords: environmental regulation; Taiwanese investment in mainland China; system GMM environmental regulation; Taiwanese investment in mainland China; system GMM
MDPI and ACS Style

Yang, F.; Gan, Q. Impact of Regional Environmental Regulations on Taiwanese Investment in Mainland China. Sustainability 2021, 13, 4134. https://doi.org/10.3390/su13084134

AMA Style

Yang F, Gan Q. Impact of Regional Environmental Regulations on Taiwanese Investment in Mainland China. Sustainability. 2021; 13(8):4134. https://doi.org/10.3390/su13084134

Chicago/Turabian Style

Yang, Fang; Gan, Qinfan. 2021. "Impact of Regional Environmental Regulations on Taiwanese Investment in Mainland China" Sustainability 13, no. 8: 4134. https://doi.org/10.3390/su13084134

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