VAR analysis of foreign direct investment and environmental regulation: China's case

• Authors: Wen-Bin Peng , Kun Tian , Yin-Hua Tian , Guo-Cheng Xiang
• Languages of publication: EN

Abstracts

EN

This paper employs impulse response function of VAR model and the estimation variance decomposition method to investigate the two-way dynamic relationship between environmental regulation and FDI during 1985 to 2009. The result of generalized impulse response shows the impact effects of environmental regulation exerting to FDI become less and less in long-term, which verifies “hypothesis of pollution heaven”. The inverse U-shape curve of “environmental regulation - FDI” depends on the choice of regulation indicators. Furthermore, the positive impulse response shows the inflows of FDI would cause the deterioration of ecology and the intervene of governments, which gives pressure to the transformation of environmental regulation standard

Keywords

EN

Foreign direct investment environmental regulation

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Prague Development Center, Czech Republic
• Journal: Business and Economic Horizons
• Year: 2011
• Volume: 5
• Issue: 2
• Pages: 13-22

Contributors

author

Wen-Bin Peng

author

Kun Tian

author

Yin-Hua Tian

author

Guo-Cheng Xiang

• Business and Economic Horizons, redakce, Prague Development Center s.r.o., Bořivojova 1081 / 40, 130 00, Prague 3 - Žižkov, Czech Republic