Abstract
This paper examines the spatial impacts of foreign direct investment (FDI) on sulfur dioxide (SO2) emissions in the Beijing-Tianjin-Hebei region located in northern China. To avoid making coefficient estimation errors, we use spatial panel data on 10 cities in the Beijing-Tianjin-Hebei region for 2000 to 2013. We first analyze the effects of FDI on air pollution levels in the Beijing-Tianjin-Hebei region from ordinary least squares (OLS). Then, the existence of a spatial correlation is examined via a Lagrange Multiplier (LM) test, and the Spatial Durbin Model (SDM) is adopted to investigate the influence of FDI on SO2 emissions in this region. The results show that FDI has a significantly positive impact on SO2 emissions, suggesting that an increase in FDI inflows would increase air pollution levels in the Beijing-Tianjin-Hebei region. Furthermore, the air quality of local cities is also influenced by FDI inflows in surrounding areas.
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