Foreign Direct Investment And Air Pollution In China: Evidence From Chinese Cities
AbstractIn order to gain deeper insight into the impacts of FDI on the air pollution situation in Chinese cities, I construct a simultaneous system. This system supposes the air pollution indicators to be determined by economic scale, industrial composition and technical characters of a city and in turn, FDI entry can affect the production scale, structure transformation and technical progress in pollution abatement activities. This system is tested for two air pollution cases in China: the annual average concentration of SO2 and total suspended particles (TSP). Based on a panel database of 80 cities (1993-2001), the system is estimated by the Generalized Method of Moment (GMM) estimator for simultaneous system. The fixed effect estimator and the method of Anderson and Hsiao (1982) are included to take into account the city’s specific effect and the potential first-order autocorrelation respectively. The results show that although there exist various channels through which FDI affects pollution, the impacts of FDI on pollution are mainly exerted through scale and technical effects. Corresponding to similar studies, the total environmental impacts of FDI in both pollution cases are proven to be very small.
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Bibliographic InfoArticle provided by Region et Developpement, LEAD, Universite du Sud - Toulon Var in its journal Région et Développement.
Volume (Year): 28 (2008)
Issue (Month): ()
CHINA; FDI; SO2 CONCENTRATION; TSP CONCENTRATION; CITIES; SIMULTANEOUS SYSTEM; SCALE; COMPOSITION AND TECHNICAL EFFECT;
Find related papers by JEL classification:
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
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