(Correspondent: Wang Tianjian) The paper “Tightening Environmental Regulation, Foreign Capital Divestment and Green Upgrading of the Foreign Investment Structure”, co-authored by Professor Yan Bing and doctoral student Guo Shaoyu from our school, was published in The Journal of World Economy, 7th issue of 2022.

It is pointed out in the paper that while regulatory environmental oversight in China has been continuously strengthened, the scale of foreign direct divestment has also been showing an increasing trend. Considering the mandatory emission reduction target constraints reinforced by the Eleventh Five-Year Plan(2006-2010), this paper examines the impact of environmental regulation on foreign divestment. The results of the study demonstrate that “tightening” environmental regulatory constraints leads to foreign direct divestment, but this effect is only significant in the short term, and the construction of government environmental governance infrastructure can effectively mitigate this effect. Although the “tightening” of environmental regulatory constraints significantly increases foreign direct divestment, it does not affect the inflow of foreign capital, and helps to promote the green upgrading of the industrial structure of foreign direct investment as a whole. Further research indicates that foreign investment from countries with stricter environmental regulations and industries with higher pollutant intensity are more sensitive to the “tightening” of environmental regulation.

Founded in 1978 and sponsored by China Society of World Economics and Institute of World Economics and Politics Chinese Academy of Social Sciences, The Journal of World Economy is one of China’s earliest journals of world economy. It is recognized as a top journal of economics by universities and research institutions in China.