The Relationship Between Foreign Direct Investment Economic Growth and Environmental Pollution in Central China

Abstract

As one of China’s four major economic regions, central China plays a cri tical role in China’s regional economic development. As the continuous improvement of economic strength and the increase of foreign direct investment in central Ch ina, this will have a certain impact on the local environment. The coordinated development of the environment and economy is still one of the important issues for the development of central China . It is necessary to focus on the relationship between econom y, FDI, and environment in central China. Therefore, this thesis used Panel Vector Autoregressive (Panel VAR) model, through impulse response function, variance decomposition to empirically study and compare the relationship between foreign direct investm ent, economic growth and environmental pollution in central China. The evidence shows that there is a different relationship between economic growth, foreign direct investment, and different environmental pollutants in central China. Compared with industr ial wastewater emission, the relationship between industrial waste gas discharge and industrial solid waste discharge and the other two variables are more significant. Finally based on the research result, this thesis put forward reasonable suggestions for central China to promote the harmonized development of the economy and environment.