Journal
ENVIRONMENTAL & RESOURCE ECONOMICS
Volume 51, Issue 2, Pages 255-275Publisher
SPRINGER
DOI: 10.1007/s10640-011-9498-2
Keywords
FDI; Human capital; Pollution haven hypothesis; Environmental pollution; China
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By using provincial socioeconomic and environmental data, this paper examines the relationship between human capital, FDI and pollution emissions in China. The result shows the impact of FDI on pollution emission is highly dependent on the level of human capital. FDI is negatively associated with pollution emissions in provinces with the higher levels of human capital, whereas FDI is positively related to pollution emissions in provinces with the lower levels of human capital. This suggests that pollution haven hypothesis (PHH) holds only in those provinces with low human capital. This study also finds that the sign of FDI's effect on each pollutant' emission requires the different threshold level of human capital, which may help to reconcile the current conflicting PHH empirical evidences partially.
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