95% of researchers rate our articles as excellent or good
Learn more about the work of our research integrity team to safeguard the quality of each article we publish.
Find out more
ORIGINAL RESEARCH article
Front. Environ. Sci.
Sec. Environmental Economics and Management
Volume 13 - 2025 | doi: 10.3389/fenvs.2025.1577657
Spatial effects of environmental factors on foreign direct investment: Evidence from Chinese cities
Provisionally accepted- Xiamen Institute of Technology, Xiamen, China
China's rapid economic growth and the influx of foreign investment have greatly contributed to increased pollutant emissions. As a result, the country faces growing challenges in balancing environmental protection with green economic development. It is crucial to understand the spatial variation in foreign direct investment (FDI) and environmental pollution across cities, as well as the impact of pollution during periods of severe environmental degradation. This study analyzes the spatial distribution and changes over time of FDI and environmental pollution in Chinese cities from 2010 to 2019. It also explores the spatial effects of environmental pollution on FDI. Using a generalized differences-in-differences (DID) model, the research examines how China's Atmospheric Key Control Zone (AKCZ) policy has affected FDI in cities and their neighboring areas. The results show that cities with higher pollution levels attract less FDI, and pollution in one city can deter investment in surrounding areas. On the other hand, better air quality in a city tends to encourage FDI in nearby regions. The AKCZ policy has a positive impact on FDI within the designated cities but causes a "siphoning" effect in neighboring areas. Well-designed environmental policies are essential for aligning environmental protection with the attraction of foreign investment, ultimately supporting the sustainable development of urban economies.
Keywords: Air Pollution, Environmental Policy, Chinese cities, Spatial effects, environmental economics
Received: 16 Feb 2025; Accepted: 02 Apr 2025.
Copyright: © 2025 Su. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence:
Ruiqian Su, Xiamen Institute of Technology, Xiamen, China
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.