Impacts of Foreign Direct Investment and Industrial Structure Transformation on Haze Pollution across China

Abstract

With the development of economic globalization, some local environmental pollution has become a global environmental problem through international trade and transnational investment. This paper selects the annual data of 30 provinces in China from 2000 to 2017 and adopts exploratory spatial data analysis methods to explore the spatial agglomeration characteristics of haze pollution in China’s provinces. Furthermore, this paper constructs a spatial econometric model to test the impact of foreign direct investment (FDI) and industrial structure transformation on haze pollution. The research results show that the high-high concentration area of haze pollution in China has shifted from the central and western regions to the eastern region and from inland regions to coastal regions. When FDI increases by 1%, haze pollution in local and neighboring areas will be reduced by 0.066% and 0.3538%, respectively. However, the impact of FDI on haze pollution is heterogeneous in different stages of economic development. FDI can improve the rationalization level of industrial structure, and then inhibit the haze pollution. However, FDI inhibits the upgrading level of industrial structure to a certain extent, and then aggravates the haze pollution. The research in this paper provides an important decision-making basis for coordinating the relationship between FDI and environmental pollution and realizing green development.