Abstract
Air pollution has attracted much attention worldwide. Sulfur dioxide (SO 2 ) is a major air pollutant in cities and affects human health seriously. The purpose of this paper is to examine how foreign direct investment affects SO 2 emissions and whether the pollution haven hypothesis exists in eastern China. On basis of the detailed data, we performed the spatial autocorrelation analysis and the spatial regression analysis. The results show that an increase in the foreign direct investment in a city is associated with a decline in SO 2 emissions in the same city, indicating that the pollution haven hypothesis does not hold in eastern China. But the spillover effect of the foreign direct investment is positive, indicating that a larger foreign direct investment in neighboring cities tends to raise SO 2 emissions in the local city.
Highlights
Air pollution has become a serious problem worldwide and has raised considerable concerns in China
From 2011 to 2017, the Moran’s I values of foreign direct investment are all positive, and the p-values are all less than 1%. It indicates that the null hypothesis should be rejected and the foreign direct investment in Yangtze River Delta has a significant positive spatial autocorrelation
This paper has examined the extent to which foreign direct investment (FDI) can affect the SO2 emissions in the Yangtze River Delta region, a vital economic region in eastern China
Summary
Air pollution has become a serious problem worldwide and has raised considerable concerns in China. Many theories have guessed how foreign direct investment (FDI) could affect SO2 emissions. The pollution haven hypothesis suggests that FDI may worsen the environment and lead to an increase in SO2 emissions [5]. The pollution halo hypothesis believes that FDI is good for the environment [4]. Our paper aims to figure out how FDI affects SO2 emissions and whether the pollution haven hypothesis or the pollution halo hypothesis is valid. Figuring out this impact is important, because the government can use this information to formulate appropriate policies of investment, balancing the economic development against environmental protection
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