The Impact of FDI on Urban PM 2.5 Pollution in China: The Mediating Effect of Industrial Structure Transformation

Taowu Pei, Lei Gao, Chao Yang, Chang Xu, Yu Tian and Weiming Song
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Taowu Pei: College of Economics and Management, China Agricultural University, Beijing 100083, China
Lei Gao: School of Economics and Management, Yanshan University, Qinhuangdao 066004, China
Chao Yang: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Chang Xu: Institute of Finance and Public Management, Anhui University of Finance and Economics, Bengbu 233030, China
Yu Tian: Institute of Ancient Books, Jilin University, Changchun 130012, China
Weiming Song: School of Economics and Management, Beijing Forestry University, Beijing 100083, China

IJERPH, 2021, vol. 18, issue 17, 1-24

Abstract: With the rapid growth of foreign direct investment (FDI), PM 2.5 pollution in Chinese cities is increasing. Based on panel data for 271 Chinese cities from 2003 to 2016, this paper uses the dynamic spatial fixed-effects Durbin model to analyze the correlation between FDI and PM 2.5 pollution and the effect of FDI on urban PM 2.5 concentrations, as mediated by industrial structure transformation, which is clarified using Stata/SE 16.0. The results showed that PM 2.5 pollution in China has significant spatial spillover effects, and the pollution haven hypothesis is applicable to Chinese cities. The industrial structure partially mediates the relationship between FDI and PM 2.5 . This paper proposes that local governments should promote the market-oriented reform of FDI to create a more convenient, legalized, and international environment for FDI and innovate the governance philosophy of only reducing the existing emissions. A top-level design and sound market supervision system of PM 2.5 control are also needed.

Keywords: FDI; PM 2.5; upgrading of industrial structure; rationalization of industrial structure (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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