Does Foreign Direct Investment Affect Tropospheric SO2 Emissions? A Spatial Analysis in Eastern China from 2011 to 2017

Air pollution has attracted much attention worldwide. Sulfur dioxide (SO2) is a major air pollutant in cities and affects human health seriously. The purpose of this paper is to examine how foreign direct investment affects SO2 emissions and whether the pollution haven hypothesis exists in eastern China. On basis of the detailed data, we performed the spatial autocorrelation analysis and the spatial regression analysis. The results show that an increase in the foreign direct investment in a city is associated with a decline in SO2 emissions in the same city, indicating that the pollution haven hypothesis does not hold in eastern China. But the spillover effect of the foreign direct investment is positive, indicating that a larger foreign direct investment in neighboring cities tends to raise SO2 emissions in the local city.