Abstract: Based on manufacture data of 30 provinces of China from 1999 to 2007, from the angle of government honest degree, considering the impact of FDI on environmental laws, i.e. endogeneity of environmental policy, this paper employs simultaneous equation to analyze the relationship among FDI, environmental regulation and environmental pollution. It arrives at following conclusions: firstly, the lax environmental policy of China has strongly attracted more FDI, while previous research underestimated this effect; secondly, the influence of FDI on environmental laws relates to degree of local government corruption, and FDI has negatively affected environmental policy under current corruption level; thirdly, FDI indeed increased the local pollution generally, but the pollution intensity remains unclear.
Keywords: FDI, Environmental Regulation, Environmental Pollution
source:Finance & Trade Economics ,No.1,2013