An Empirical Analysis of the Impact of FDI on the Environmental Quality in Shaanxi Province

Since reform and opening up, especially since 1990s, the scale of foreign direct investment attracted and used by Shaanxi province has been expanding. And meanwhile, the environmental quality of Shaanxi has changed greatly. By the ADF (Augmented Dickey-Fuller) stationary test, Grainger causality and co-integration analysis, based on the data of 1992-2015, this paper made an empirical analysis about the influence of foreign direct investment on environment with the environmental effects decomposed into scale effect, structure effect and technical effect. The results indicated that the change of the emission of Shaanxi province was not the Granger cause of the change of foreign investment, but foreign investment had some impacts on the environmental quality of Shaanxi province at a certain level. And the environmental effects which brought about by the expansion of the economic scale and the technology transfer which induced by the stock of foreign direct investment were negative, only the environmental effects which brought about by the economic structure were positive, but the overall environmental effects were negative. Finally, the paper gives some helpful suggestions based on research results above.