Keywords:
• foreign direct investment/
• environmental regulation/
• haze pollution/
• simultaneous equation model

Abstract:Under the background of accelerating the pace of opening up to the outside world and strengthening ecological environment protection, the relationship between foreign direct investment(FDI), environmental regulation and haze pollution was explored. It not only provides a new perspective for understanding how FDI affects the environment, but also enriches the research field of environmental regulation. Under the framework of Copeland and Taylor models, haze pollution was decomposed into structural effect, technical effect, scale effect and regulatory effect, and then how FDI affected haze pollution was explained. On the basis of the distinction between formal environmental regulation and informal environmental regulation, the simultaneous equation model and Chinese provincial panel data were used to test the relationship between FDI, environmental regulation and haze pollution, and the threshold regression model was used to empirically analyze the phased features of the environmental effect of FDI. The research showed that:(1)FDI had a double effect on haze pollution:it aggravated haze pollution through scale effect and structure effect, and reduced haze pollution through technical effect;(2)While environmental regulation improved the structural and technological effects of local FDI, it forced the transfer of polluting FDI to neighboring regions, hindering the upgrading of industrial structure and green technology progress in these regions, thus not conducive to global environmental governance;(3)The effect of FDI on haze pollution was generally not significant, but the role of the former on the latter was affected by environmental regulation. With the increase of formal environmental regulation intensity, the effect of FDI on haze pollution would turn to be inhibiting first, and then aggravating and then inhibiting again. When the intensity of informal environmental regulation surpassed a certain threshold, the effect of FDI on haze pollution was transformed from the "pollution heaven" effect to the "pollution halo" effect;(4) The effect of different types of environmental regulation on haze pollution were significantly different. Informal environmental regulation was a more crucial factor for promoting industrial restructuring and green technological progress, thereby reducing haze pollution. Therefore, the concerted efforts in optimizing business environment, implementing classified environmental regulation and joint prevention and control of pollution can bring the environmental welfare benefits of FDI into full play.