The Influence of Foreign Direct Investment and Economic Development on Environmental Pollution

Abstract

Foreign direct investment has driven the growth of China's economy, but also caused many environmental problems, threatening the health of residents, restricting the further economic development. Striking a balance between the economy, FDI and the environment to achieve sustainable growth is an urgent task. To study whether FDI and economic growth cause pollution to the environment; the data of Chinese autonomous regions from 2010 to 2019 were selected as the research sample, with sulfur dioxide as the pollutant index, per capita GDP as the economic level index, and the actual amount of foreign capital used as the FDI index. The relationship between FDI, economic growth and environmental pollution in China is empirically analyzed, and the relationship between them and environmental quality is further determined by comprehensively considering industrial structure, capital-labor ratio, environmental management level and other indicators. It concludes that FDI correlates with environmental pollution. There is a positive correlation between economic growth and environmental pollution. The industrial structure, capital labor rate and environmental pollution positively correlate, while the pollution control level and environmental pollution negatively correlate.