Foreign Direct Investment, Governance, and the Environment in China: Regional Dimensions

285 Pages·2013·3.777 MB·English

by  Jing Zhang (auth.)

Foreign Direct Investment, Governance, and the
Environment in China
The Nottingham China Policy Institute Series
The Nottingham China Policy Institute series brings together cutting-edge schol-
arship, policy relevance and accessibility. It includes works on the economics,
society, culture, politics, international relations, national security and history of
the Chinese mainland, Taiwan and Hong Kong in the twentieth- and twenty-fifirst
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ship at its best in the study of contemporary China.
Titles include:
Steve Tsang (editorr)
THE VITALITY OF JAPAN
Politics, Economics, Society and Culture
Jing Zhang
FOREIGN DIRECT INVESTMENT, GOVERNANCE, AND THE ENVIRONMENT IN
CHINA
Regional Dimensions
The Nottingham China Policy Institute series
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Foreign Direct Investment,
Governance, and the
Environment in China
Regional Dimensions
Jing Zhang
University of Nottingham
© Jing Zhang 2013
Softcover reprint of the hardcover 1st edition 2013 978-0-230-35415-9
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ISBN 978-1-349-34626-4 ISBN 978-1-137-31865-7 (eBook)
DOI 10.1057/9781137318657
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For Bing and Amy
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Contents
List of Tables xi
List of Figures xiii
Acknowledgements xiv
List of Abbreviations xvi
1 Introduction 1
1.1 Introduction 1
1.2 Structure of the bookk 6
Part I The Effects of Growth and FDI on
the Environment in China
2 Economic Growth, FDI, and the Environment in China 1 1
2.1 Introduction 11
2.2 Patterns of economic growth in China 12
2.3 Trends and patterns of FDI in China 18
2.4 Unbalanced distribution of FDI in China 20
2.4.1 Main sources of FDI 21
2.4.2 Forms of FDI 23
2.4.3 Geographical distribution 25
2.4.4 Sectoral distribution of FDI 27
2.5 Conclusions 31
3 Environmental Quality in China 32
3.1 Introduction 32
3.2 Overview of the natural environment in China 33
3.3 Water pollution 36
3.4 Air pollution 39
3.5 Solid waste pollution 42
3.6 Costs of pollution 45
3.7 Conclusions 47
4 Literature Review on EKC and the Effects of
FDI on the Environment 49
4.1 Introduction 49
4.2 Economic growth and the environment 51
4.2.1 Theoretical principles 51
vii
viii Contents
4.2.2 Empirical studies 52
4.2.3 Critiques of the EKC 55
4.3 Effects of FDI on the environment 5 7
4.3.1 Theoretical analysis 5 7
4.3.2 Empirical studies 5 8
4.3.3 Empirical studies related to China 60
4.4 Conclusions 6 1
5 Growth, FDI, and the Environment:
Evidence from Chinese Cities 63
5.1 Introduction 6 3
5.2 Background information on Chinese cities 64
5.2.1 Economic development and FDI in
Chinese cities 6 4
5.3 Environmental quality in Chinese cities 67
5.3.1 Water pollution 6 8
5.3.2 Air pollution 6 9
5.3.3 Industrial water and air pollutants 73
5.4 Methodologyy 8 0
5.4.1 Model specifications 80
5.4.2 Data description 86
5.4.3 Methodological issues 90
5.5 Empirical results 9 1
5.6 Conclusions and policy implications 100
Appendix 5.1 Variable definitions and data sources 1 03
Appendix 5.2 Cities in the sample (number of cities in
subgroups in brackets) 104
Part II T he Effect of Environmental
Regulations on FDI in China
6 FDI and Environmental Regulations in China 107
6.1 Introduction 1 07
6.2 Regulatory framework of environmental
protection in China 1 08
6.3 Effects of environmental regulations 111
6.4 Implementation of environmental regulations 114
6.5 Conclusions 116
7 Theoretical and Empirical Studies on FDI and
Environmental Regulations 118
7.1 Introduction 118
7.2 Trade and investment theory and the environment 119
Contents ix
7.3 Empirical literature on FDI and environmental
regulations 121
7.3.1 Three frameworks of foreign direct investment 1 21
7.3.2 Empirical evidence for the pollution haven
hypothesis 122
7.3.3 Empirical evidence on Chinese data 125
7.4 Conclusions 128
8 Do Intra-Country Pollution Havens Exist? 130
8.1 Introduction 130
8.2 Methodology 1 31
8.2.1 Estimating models 131
8.2.2 Data description 136
8.2.3 Selection of estimators 141
8.3 Empirical results 1 43
8.4 Conclusions 1 55
Appendix 8.1 Variables definitions and data sources 157
A ppendix 8.2 Normalization of the Share of the
Environmental Investment 158
Appendix 8.3 Hausman specification test 159
Part III Corruption, Government, FDI, and
the Environment in China
9 Literature Review 163
9.1 Introduction 163
9.2 Corruption and governance 165
9.2.1 What is corruption? 165
9.2.2 Governance and corruption 167
9.3 Empirical evidence 168
9.3.1 Empirical evidence on corruption and FDI 168
9.3.2 Empirical evidence on governance and FDI 171
9.4 Conclusions 172
10 Corruption, Anti-corruption, and Governance
in China 174
10.1 Introduction 174
10.2 Corruption in China 175
10.3 Anti-corruption in China 178
10.4 Corruption and FDI 1 81
10.5 Provincial anti-corruption efforts 182
10.6 Provincial government efficiency 187
10.7 Conclusions 195