The “Pollution Halo” Effect of FDI: Evidence from the Chinese Sichuan–Chongqing Urban Agglomeration

Lei Gao, Taowu Pei (), Jingran Zhang () and Yu Tian
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Lei Gao: School of Economics and Management, Yanshan University, Qinhuangdao 066004, China
Taowu Pei: College of Economics and Management, China Agricultural University, Beijing 100083, China
Jingran Zhang: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Yu Tian: Institute of Ancient Books, Jilin University, Changchun 130012, China

IJERPH, 2022, vol. 19, issue 19, 1-17

Abstract: In this paper, panel data from nineteen key cities in the Sichuan–Chongqing urban agglomeration from 2003 to 2016 were used as the study sample. Using the stochastic impacts by regression on population, affluence, and technology (STIRPAT) model, the effect of foreign direct investment (FDI) on particulate matter (PM 2.5 ) pollution and its action mechanism in the Sichuan–Chongqing urban agglomeration were considered for both socioeconomic and natural factors. The results showed that the “pollution halo” hypothesis of FDI in the Sichuan–Chongqing urban agglomeration has been supported. There are significant positive spatial spillover effects of PM 2.5 pollution in this urban agglomeration, and the introduction of FDI is conducive to alleviating PM 2.5 pollution in the urban agglomeration. Similar to the “inverted U” curve proposed by the environmental Kuznets curve (EKC) hypothesis, there was a significant “inverted U” curve relationship between PM 2.5 pollution and economic growth in the Sichuan–Chongqing urban agglomeration. However, there was a significant “U”-type curve relationship between the urbanization degree and the PM 2.5 concentration, which indicates that the current urbanization mode may aggravate the pollution degree of PM 2.5 in the urban agglomeration in the long term. Furthermore, the two natural factors of annual average temperature and annual precipitation play an important role in PM 2.5 pollution and spatial spillover effect in the Sichuan–Chongqing urban agglomeration. Economic development and rationalization of the industrial structure are the main ways by which FDI affects PM 2.5 pollution in the urban agglomeration. The research conclusions of this study can be of great practical significance to optimize the regional industrial layout, control PM 2.5 pollution, and establish a sustainable development policy system in the Sichuan–Chongqing urban agglomeration.

Keywords: FDI; PM 2.5 pollution; pollution halo; STIRPAT model; Sichuan–Chongqing urban agglomeration (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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