An empirical model on the impact of foreign direct investment on China’s environmental pollution: analysis based on simultaneous equations

  • Emmanuel Caesar AyambaEmail author
  • Chen Haibo
  • Abdul-Aziz Ibn Musah
  • Appiah Ruth
  • Andrew Osei-Agyemang
Research Article


This paper analyses the link between foreign direct investment (FDI) and economic growth and their subsequent impact on environmental pollution in China. The simultaneous equation method was used with data from 31 provinces in China covering the period between 1995 and 2016. The findings indicate that the effect of FDI on economic growth, industrial structure, and environmental pollution control positively impacts on China’s industrial pollution control and environmental conditions, implying that China should encourage foreign capital investments that come with advanced production technology and green production processes. This will enhance efficient resource utilization, adherence to environmental standards, and ensuring sustainable economic development.


Foreign direct investment Environmental pollution Simultaneous equations Sustainable development Economic growth 



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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.School of Finance and EconomicsJiangsu UniversityZhenjiangPeople’s Republic of China
  2. 2.School of Management Science and EngineeringJiangsu UniversityZhenjiangChina

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