Empirical study of FDI spillover effect and the relationship with environment

This study used Generalized Method of Moments (GMM) estimation method to test the horizontal, forward and backward spillover effects of the Foreign Direct Investment (FDI) and the impact of environmental regulation on industrial technological progress, the effect of environmental regulation on the effect of FDI on industrial technological progress, by using the correlated data of 39 industries during 2001-2010 in Beijing. Empirical results showed several important conclusions: First, FDI horizontal spillover has promotion effects on industrial technological progress; second, FDI forward spillover had uneven promotion effects on industrial technological progress and the enhancing of environmental regulation intensity also had significant promotion effects on industrial technological progress; third, the studies suggested that the enhancements of environmental regulation also facilitated FDI horizontal spillovers in the long run.