Journal of Nankai University (Philosophy,Literature and Social), 2010, Issue 3

Authors: Bao Qun, Lv Yue, Chen Yuanyuan

Abstract: We investigate the effect of foreign investment on six pollutants such as industrial polluted water, and sulfur dioxide according to China's panel data of 36 manufacturing sectors during 2001-2006, which shows that there is a significantly negative correlation between the entry of foreign firms and pollution emission per capita, that is contrary to thepopular hypothesis so called pollution haven. We also find that the environmental effect of foreign investment notably varies among different sectors. Veanwhile, the increase of productivity and S&T expenditure helps to facilitate pollution abatement, and increasing environment-related personnel and the share of state  owned enterprises have a positive effect on pollution emission too.

Key Words: Foreign Investment; Environmental Pollution; Manufacturing Sectors; Panel Data