Research on the impact of public environmental participation on foreign direct investment: evidence from China

Since the reform and opening up, the scale of foreign direct investment (FDI) inflows into China has been continuously expanding, but the imperfect environmental governance mechanism has led to increasingly severe environmental problems in China. This paper studies the impact and mechanism of public environmental participation (PEP) on FDI. The results show that PEP has a significant negative impact on the FDI inflow of enterprises. Hindrance effect of PEP on enterprise FDI is more obvious in economically developed eastern regions, coastal cities and first-tier cities. PEP has a greater impact on FDI in high-tech industries. The economic growth target has a restraining effect on China’s environmental protection, weakening public supervision of FDI. The constraint of economic growth targets increases the pressure to develop the economy, and weakens the inhibitory effect of PEP on corporate FDI. This study provides important empirical evidence for improving China’s environmental governance system and high-quality utilization of foreign investment.


Introduction
FDI has become a key drive for China's economic growth.With abundant natural resources, a huge population and consumer market, China becomes the second largest country to absorb and utilize foreign investment.The large-scale entry of foreign capital has brought dividends in technology, knowledge and management experience.However, resource consumption has been accelerating, and environmental pollution has become increasingly serious [1].The policies and measures introduced in the early stages have had little effect due to the failure to organically integrate implementation and supervision [2].The 'Two Mountains Theory' clarifies that protecting the ecological environment is protecting productive forces, and improving the ecological environment is developing productive forces.However, due to the asymmetry of government information and rent-seeking behavior between enterprises and officials, restrictions are imposed in fiscal budget, regulatory intensity, and enforcement intensity, resulting in deficiencies in the environmental governance system.China's environmental pollution remains a major challenge [3].China's long-standing environmental governance system, which has been dominated by government control and administration, is not suitable for China's new stage of development [4].How to reconcile the relationship between opening up and environmental governance has become a new challenge for China's economic development.Chinese public's awareness of environmental protection and green development has been continuously improved [5], and has gradually been recognized as an important social subject in environmental governance.However, PEP remains on the fringes of China's environmental governance system [6,7].
There are also some provisions on the public participation system in Chinese legislation.Environmental issues are closely related to the public's living and production activities, and the harmfulness of environmental pollution make it necessary for the public to become participants in the environmental governance system [8].As global warming becomes an international issue, governments and citizens are becoming more concerned about the goals other than economic growth [9].The increasing willingness of the Chinese public to protect the environment and the recognition of public participation have made the Chinese government to ensure public participation in environmental governance [10].The rising public concern about the environment has promoted local governments in environmental governance [11].Therefore, the relationship between PEP and FDI is an important research topic, which involves multiple dimensions and impacts of environment, economy, and society.However, there is currently limited literature on this topic, especially in the context of China, where there is a lack of in-depth and systematic research.
The contribution of this paper is to innovatively study the impact of PEP on FDI from the perspective of informal environmental regulation, which make the research conclusions much richer and more comprehensive.This paper studies the impact of PEP on FDI from the micro-enterprise level, and empirically tests the impact mechanism through the mediation effect model, which effectively opens the 'black box' between PEP in FDI inflow.In addition, this paper explores the constraint mechanism and characteristics of PEP affecting FDI under the pressure of dual assessment of economy and environment.
This paper is divided into seven sections, the first of which serves as an introduction.The second section discusses studies on the relationship between environmental regulation and FDI.Theoretical analysis is displayed in section 3. Section 4 mainly introduces the methods and models.Section 5 discusses the empirical results.The expansive analysis is discussed in section 6.In section 7, the main results and policy implications are presented.
2. Literature review 2.1.Foreign direct investment FDI is an important component of economic globalization, and its influencing factors and effects are hot topics in academic research.Scholars have studied the factors that can influence FDI including exchange rates [12][13][14][15], regional economic development levels [16,17], production costs [18], natural resources [19], human capital [20] and host country political systems [21][22][23].FDI is positively correlated with economic growth and is influenced by the institutional environment and human capital of the host country [16].The decrease in freight costs is an important factor in promoting the growth of cross-border investment [18].The impact of a country's democratic level on FDI depends on the scale of natural resources [19].There is a positive correlation between FDI in the United States overseas and the presence of immigrants from host countries, with a greater impact on immigration to higher education [20].
Scholars have analyzed the effects and pathways of FDI on capital formation, employment creation, corporate efficiency, and economic growth in host countries.FDI is becoming increasingly important to host countries as it not only brings capital and creates jobs, but also drives economic growth by improving the efficiency of firms [24].However, it has also raised concerns about environmental pollution caused by FDI.Copeland and Taylor [25] argued that under free trade conditions, developed countries will move pollutionintensive industries to countries with weak environmental regulations, which is known as the 'Pollution haven hypothesis'.Xing and Kolstad [26] pointed out that lax environmental regulation will attract high-energyconsuming and polluting FDI, and this attraction will no longer exist with enhanced environmental regulation.Dean, Lovely [27] found that environmental regulation influences the location decision of enterprises, while polluting investors do not come from developed countries, but from highly polluting industries.Cai, Lu [28] found that the severity and enforcement of environmental policies will have an impact on foreign investment inflows, and strict environmental regulations will reduce foreign capital inflows, and this impact will have a greater impact on FDI from countries with low levels of environmental regulation.Bu and Wagner [29] found that there are both 'racing to the bottom' and 'racing to the top' in FDI site selection by multinational companies, which is affected by various factors.

Public environmental participation
PEP, as an informal environmental regulation, has received widespread attention from the academic community.Previous studies have mainly focused on the environmental benefits of PEP, and it is generally believed that PEP has significant environmental benefits.Nie and Zhang [30] argued that protecting citizens' right to disclose accidents is conducive to social stability and reducing the occurrence of environmental problems.Li [31] found that public participation will promote local governments' efforts in environmental governance, but public participation through different channels such as petitions and online public opinion will have different impacts on government environmental governance.Guan [32] pointed out that public participation has a restraining and corrective effect on the governance of local governments.When the degree of public participation in environmental governance is high, the efficiency of environmental governance can be significantly improved.Xue, Zhang [33] found that when the information of air pollution is released in the society, it will lead to citizens' health concerns, and citizens are more willing to work in areas with less air pollution.Areas with high air pollution will face the risk of losing human capital, forcing local governments to improve the environment.Li, Gu [34] pointed out that public environmental demands can inhibit corporate polluting emissions.Fedorenko and Sun [35] found that on the platform of Weibo websites, the power of the public as the main body of environmental protection can play a significant role.However, some studies suggest that public environmental participation has no impact on government environmental policies.Pargal, Mani [36] conducted an empirical study on 250 large and medium-sized manufacturers in India and found that public participation did not significantly suppress pollutant emissions.

The impact of PEP on FDI
There is relatively little direct research on the impact of PEP on FDI.Previous studies have mainly focused on the impact of environmental regulations on FDI, and analyzed it from the Pollution haven hypothesis and the Porter hypothesis.Pollution haven hypothesis suggests that strict environmental regulations will increase the environmental governance costs of enterprises within the region.Driven by the principle of maximizing profits, high polluting enterprises tend to choose locations in areas with low environmental regulations in order to lower environmental tax costs [37], or transfer enterprises from high environmental cost areas to low environmental cost areas [38], thereby reducing FDI inflows.Numerous studies have confirmed the effectiveness of the Pollution haven hypothesis in China.Kong, Lu [39] found that environmental target constraints have a significant inhibitory effect on FDI.Chen, Kahn [40] found that water pollution control in China significantly reduces pollution intensive corporate activities in highly regulated areas, while upstream cities with relaxed regulations attract more polluting enterprises.Porter hypothesis suggests that designing reasonable environmental regulatory policies can stimulate corporate innovation behavior and generate an innovation compensation effect [41].Enterprises improve their production efficiency and product quality through technological innovation, thereby enhancing their international competitiveness and attracting more FDI.
In summary, scholars have conducted extensive discussions on the impact of different environmental regulatory policies on FDI [42][43][44], but have not reached a consensus.There is little literature on the impact of PEP on FDI.Moreover, most of the literatures on government environmental regulation by PEP has overlooked the moderating effects of economic and environmental target constraints.

Theoretical analysis
The influence of public environmental demands on FDI transmission mechanism is shown in figure 1.

Public environmental participation in FDI
PEP is a bidirectional dynamic process that can influence the motivation and ability of governments to formulate and implement environmental policies, as well as reflect the effectiveness and satisfaction of government environmental policies.Therefore, PEP is not only a driving factor of environmental policies, but also a response factor to environmental policies.According to the environmental citizenship theory, the rights and duties of environmental citizens are interdependent.While enjoying environmental rights, citizens have the responsibility and obligation to supervise environmental pollution and ecological damage [45].To achieve PEP, the government needs to guide and promote the public at the policy and legal levels [46].The public cannot directly influence FDI after obtaining information about the environmental problems caused by FDI.The public needs to feed back the information to environmental supervisors, environmental policies formulators, and implementers of related disposals.The official government departments in China deal with a series of reported issues through the public power of the state [47].Therefore, whether the public can influence FDI is based on whether there is an effective information feedback mechanism to transmit FDI-related environmental information to the government, so as to achieve PEP.According to Pollution haven hypothesis, differences in the regional environmental regulation will encourage pollution-intensive industries or enterprises to move to regions with less regulated regulations to avoid environmental regulatory risks and reduce production costs [28,48,49].With the help of information provided by the public, governments can make more rational and consensual decisions.To improve public satisfaction and reduce public opinion, the government may choose more direct ways to solve environmental problems.After the intensity of regional environmental regulations increases, FDI will face higher entry barriers, which will eventually limit the inflow of FDI.The following hypotheses are proposed.H1: The impact of PEP on FDI is significantly negative.H2: PEP, as an informal environmental regulation, provides FDI related environmental information to encourage the government to strengthen regulation of FDI, thereby hindering the inflow of FDI.

Economic growth target constraints
The role of PEP in China is limited by some institutional factors, such as prioritizing economic growth, which can lead to varying levels of enforcement by local governments [50].Under the traditional promotion championship, local officials have formed a governance model of 'competition for growth' in order to complete the performance appraisal, that is, pursuit of gross domestic product (GDP) growth, while ignoring the ecological environment and social livelihood [51].When the central government formulates the economic growth target plan, local governments at all levels will pursue numerical economic growth in order to achieve the target or even exceed the target to send the signal that the leadership team is capable of work, resulting in the problem of 'add weight layer by layer' [52].These factors have led to the imbalance and inadequacy of government environmental policies and regulation, as well as the non-standard and irrational environmental behavior and choices of enterprises [3,4].In the early days, local governments often ignored the will of the public, lacked the motivation to improve various public services, and unilaterally pursued numerical economic growth.These economic behaviors have quick short-term results, but they are not conducive to long-term stable economic growth and industrial restructuring [53].Therefore, under the constraints of economic growth targets, it may lead to poor communication of public will, and the government may also ignore the public's information on FDI-related issues, thereby weakening the role of PEP in hindering FDI.

Environmental target constraints
Since the beginning of the 21st century, the central government has raised environmental protection issues to the national macro-planning level.After the Eleventh Five-Year Plan, strong environment-related binding targets put forward in government work reports have also become the norm, significantly promoting local governments to improve environmental regulation, adjust industrial policies and fiscal budget expenditures [54].Under the constraint of environmental goals, the government can effectively improve its 'insufficient information' dilemma by using public feedback on environmental problems, so as to introduce environmental policies and solve environmental problems in a more targeted manner, improve the efficiency of environmental governance, and effectively curb corporate pollution behavior.The following hypothesis is proposed.
H3: Economic growth target constraints will weaken the effect of PEP in hindering FDI entry.Environmental target constraints will enhance the effect of PEP in hindering FDI entry.This paper collects data on environmental petitions in each province, including the total number of letters, the total number of visits, and the batch of visits.This paper collects data on environmental proposals, including the number of environmental proposals at the NPC and the number of environmental proposals at the CPPCC.This paper uses the entropy method to measure the comprehensive measurement index of PEP, which is used as a proxy variable for PEP.The operation is as follows.
(1) Standardize the variable data of PEP.
i represents the province.t is the year.k indicates the five public participation variables.x k min( ) and x k max( ) are represented as the maximum and minimum values of the kth public participation variable, respectively.X itk indicates the standardized assignment of the kth public participation variable in the tth year of the i.
(2) Calculate the proportion of kth indicator in t year of province i.

Control variables
At the enterprise level, the enterprise debt (debt), income (income), employee salary (wage), inventory ratio (inventory), industrial added value (industrial), and total number of employees (staff) are selected.Data other than the inventory ratio are treated as natural logarithms.At the city-level, the level of urban economic development (gdp) is measured by the natural logarithm of the city's real GDP level.Urban development potential (potential) is measured in the city's budget and treated logarithmically.The level of financial development of a city (financial) is measured by the loan balance of a financial institution and treated logarithmically.

Data
The explanatory variables and enterprise-level control variables are all derived from the database of Chinese industrial enterprises.PEP involves the data of environmental petitions and environmental protection proposals of provinces, and the data of environmental protection proposals are from the China Environment Statistics Yearbook.The city-level control variables are derived from the China Urban Statistical Yearbook.Industrial value added is deflated using the industrial production price index.Fixed assets are deflated using the fixed asset investment price index.The remaining value variables are deflated using consumer price index (CPI).The missing data are supplemented with linear interpolation.Before interpolation, we obtained an imbalanced panel dataset with 1098393 observations, with 19864 missing key variables, accounting for 1.8% of the entire sample size.Therefore, interpolation does not affect the overall trend of the regression results.The sample period is 2001-2013.The samples do not include Hong Kong, Macao, Taiwan and Tibet.

Benchmark regression
The benchmark regression results are shown in table 1. Column (1) only adds FEs, and column (2) and column (3) add enterprise characteristic variables and city characteristic variables for control.Seen from the regression results, the value of R 2 increased from 0.099 to 0.194 after adding the control variables, indicating that the explanatory strength of the model gradually increased, and the selection of the control variables is reasonable.This paper examines the impact of PEP on FDI and focuses on the coefficients of variables.In column (1), the coefficient of score it is negative at the significance level of 1%.After adding the enterprise characteristic variable and the urban characteristic variable, the coefficient of the variable is significantly negative, indicating that public environmental participation has a significant negative impact on the FDI inflow of enterprises.H1 is verified.

Robustness test
To verify the robustness of the benchmark regression results, this paper tests the robustness by changing the core explanatory variable measurement method, adjusting the sample range, and nonlinear relationship test.The results are shown in table 2. Firstly, the core explanatory variable score it is re-evaluated.The original data of the environmental protection proposal of the NPC and the environmental protection proposal of the CPPCC are merged, and the TOPSIS (Technique for Order Preference by Similarity to an Ideal Solution) entropy weight method is used to obtain a new PEP proxy variable * score .
it We add the new proxy variable to the model, and add the enterprise control variable and the city control variable in turn.The results are shown in columns (1) to (3) of table 2. After changing the measurement method of the core explanatory variables, PEP still has a significant negative impact on enterprise FDI, and the coefficient of * score it is significant at the significance level of 1%.Secondly, enterprises with no less than 25% of the paid-in capital accounted for by Hong Kong, Macao and Taiwan capital and foreign capital are defined as FDI enterprises.We use this part of the sample for regression analysis.The results are shown in column 4 of table 2. The coefficient of score it is significantly negative at the significance level of 1%, which further verifies the negative impact of PEP on corporate FDI.Thirdly, the nonlinear relationship between PEP firms in FDI is tested by adding quadratic terms of core explanatory variables.The results are shown in columns (5) and (6) of table 2. The coefficient of score it is significantly negative at a significance level of 1%.The coefficient for the quadratic term score it 2 is also significant at the 1% level.The results of adding the secondary item show that there may be a U-shaped relationship between PEP in the FDI of enterprises.However, further analysis found that in the overall sample participating in the regression (without adding control variables), the number of samples on the right side of the turning point of the quadratic equation accounted for only 6.6% of the total sample, and there are not enough samples on the right side of the inflection point.Seen from figure 2, the relationship between the two is decreasing in the entire observed sample range.At the same time, considering that the overall PEP in China is still low, and are in line with the linear model.It is worth noting that this conclusion reveals that after China's PEP reaches a certain level, the hindrance to FDI will turn into attracting FDI inflows.The possible reason is that the high participation in the environment means that the overall quality of the population is improving, and the quality of human resources is also improving, which makes it much more difficult for polluting FDI to enter China.However, the attractiveness of clean FDI with high green technology content increases makes China's foreign investment structure more optimized.

Endogenous test
In order to solve the bias of the possible endogenous problems in the model on the results, this paper adopts a variety of methods such as adding control variables, lagged regression, and instrumental variable (IV) method.Firstly, the endogenous problem caused by the missing variable is solved by adding the control variable.On the basis of column (3) of table 1, we add corporate income tax and asset as control variables at the enterprise level, and population density and mileage per capita are set as control variables at the city level.The above indicators are treated with natural logarithms, and the results are shown in column (1) of table 3.After adding the control variables, the coefficient of Score it is still significant at the significance level of 1%.Secondly, lagged regression is used to solve the endogenous problem caused by reverse causation.By using the one-year lag of PEP as the core explanatory variable, the current PEP is replaced.The results are shown in column (2) of table 3. The coefficient of l_Score it in the one-year lag is significantly negative at the significance level of 1%, which further demonstrates the reliability of the benchmark regression results.Although adding control variables and lagged regression can eliminate the endogenous, it cannot solve all the possible endogenous problems.To further verify the reliability of the results, this paper uses the IV method for testing.The IV method can solve the endogenous problems that violate the assumptions of classical linear regression, including missing variables, sample selection, bidirectional  causation, and measurement error [55].Rainfall data are collected through the statistical yearbooks of each province, and the two stage least square (2SLS) method is used for regression.This article selects rainfall as the instrumental variable for PEP, based on the following considerations.Rainfall is a random phenomenon in nature and is not subject to human intervention, so it is independent of other variables outside of PEP and satisfies the exogeneity hypothesis.Rainfall affects public travel and activities, thereby affecting the ability and willingness of the public to obtain and disseminate environmental information, and is related to PEP, satisfying the correlation hypothesis.The results of the first stage of the IV method are shown in column (3) of table 3. IV has a significant negative relationship with PEP Score , it and satisfies the correlation hypothesis.Column (4) shows the regression results of the second stage.The coefficient of PEP Score it is significantly negative at the significance level of 1%, and the absolute values of the Kleibergen-Paap rk LM, Kleibergen-Paap Wald rk F, Cragg-Donald Wald F and other statistics are large enough, indicating that the selected IVs do not have the problem of insufficient identification and weak IVs, and the regression results using the IV method are valid.The reliability of the benchmark regression results is verified.4. The impact of PEP on FDI shows obvious regional heterogeneity.The coefficients in the eastern and central regions are negative, but the regression results in the central regions are not significant.It shows a positive effect in the western region.In the eastern region, where the economy is more developed and the overall quality of the public is high, the public's pursuit of life is not limited to the increase of income, but also more concerned about the quality of the environment, it has a significant hindrance to the entry of FDI.In the economically underdeveloped central and western regions, the public still expects economic growth to improve their lives.Especially for the western region, promoting regional development by attracting a large amount of FDI is still an important way.The above differences are further explained by obtaining empirical p-values by the Chow test.The empirical p-values in columns (1)-( 3) represent the test results of coefficient differences between groups between east-central, central-western, and western-eastern, respectively.The difference between east and central is significant at the 1% significance level, while the differences between central-western and westerneastern did not pass the significance test.Therefore, it is not suitable to simply extrapolate from the coefficients that affect the differences in central-western and eastern-western.

Coastal and inland cities
China's coastal cities tend to be more economically developed than inland cities, and their superior location advantages have also attracted huge number of FDI.The sample is divided into coastal cities and inland cities.The results are shown in columns (1)-( 2) of table 5.The results of column (1) indicate that PEP has a significant negative impact on FDI in coastal cities. Column (2) show that the result for non-coastal cities is not significant, but the sign is positive.Most of China's coastal cities are economically developed cities with high overall quality and good external image.The public has a higher rejection of polluting foreign investment, and also has a higher willingness and ability to participate in environmental governance and reflect the environmental demands to the government.However, inland cities are mostly located in the central and western regions, and the demand for using foreign capital to develop the economy is still high, and the degree of PEP is also low, resulting in no obvious impact on FDI.The p-value is significant at a significance level of 1%, indicating that the above differences are statistically supported.

City level
The dimensions of urban activity, commercial resource agglomeration, future development prospects, and residents' lifestyles have become the criteria for evaluating the city level in China.This paper divides the cities in the sample into first-tier cities and non-first-tier cities, and the results are shown in columns (3)-( 4) of table 5. PEP showed a significant negative impact on FDI in first-tier cities, while non-first-tier cities did not show a significant negative impact.The quality and environmental awareness of residents in eastern cities, coastal cities and first-tier cities tend to be higher, and local governments and enterprises also attach more importance to the image of cities, and they are more exclusive of polluting foreign investment.However, other regions and cities may still sacrifice the environment in order to develop their economies, and extensively introduce foreign capital for short-term economic development.The p-value is significant at a significance level of 1%, indicating that the above differences are statistically supported.6. PEP has a significant negative impact on the FDI inflow of non-SOEs, and an insignificant negative impact on SOEs.The particularity of China's SOEs allows SOEs to enjoy more resources and policy preferences.As an important part of China's economic and social development, non-SOEs ( are more closely related to residents' daily production and life, resulting in a more direct impact on non-SOEs by PEP.The p-value is significant at the 1% level, indicating that the above difference is statistically supported.

Enterprise scale
The scale of enterprises is measured by main business income and the number of employees.Enterprises with main business income and number of employees above the average are defined as large-scale enterprises, and vice versa.The regression results are shown in columns (3)-( 6) of table 6.The impact of PEP on corporate FDI is significantly negative at all the measurements.Through the comparison of coefficients, the absolute values of the coefficients of large-scale enterprises are higher than small-scale enterprises, indicating that the FDI of largescale enterprises is more affected by PEP and is more deeply affected.The p-values obtained by the Chow test are all significant at the 1% significance level, indicating that the above differences are statistically supported.7. PEP has a negative impact on both high-tech and non-high-tech industries, and a negative impact on FDI of high-tech industry enterprises.The possible reason is that China is still in the middle and lower ends of the international industrial chain and value chain, and the introduction of low-end manufacturing and processing projects with low technology content and large environmental pollution in the introduction of high-end industries is easy to cause dissatisfaction among local residents and social organizations, thus leading to PEP hindering the entry of FDI of high-tech industrial enterprises.The p-value is significant at the 1% level, indicating that the above difference is statistically supported.

The degree of industrial pollution
The sample industries are divided into high-polluting industries, medium-polluting industries and lowpolluting industries.The results are shown in columns (3) to (5) of table 7. PEP has a significant negative impact on the entry of enterprise FDI.The absolute value of the coefficients increases sequentially according to the degree of industrial pollution.Enterprises with high pollution levels in the industry are mostly located in remote suburbs, far from the public's daily life production activities, while low-polluting industries are closer to urban living areas, and the environmental problems are also more susceptible to public supervision.The p-values obtained by the Chow test are all significant at the 5% level.The differences between high-medium pollution, and medium-low pollution passed the 1% significance level test, indicating that the above differences are statistically supported.

Mechanism analysis
In order to test whether PEP has an impact on government environmental governance and environmental regulation intensity, this paper uses simple mediating effect to test the mechanism effect, and constructs the following fixed effect model.The results are shown in table 8. ger it is a proxy variable for government governance.er it is a proxy variable for the intensity of environmental regulation.
The government work reports of 30 provinces from 2001 to 2013 are collected, and the frequency of occurrence of environment-related words is counted as a proxy variable for government environmental governance.From columns (1) and (2) of table 8, the coefficient is positively significant at the significance level of 1%, indicating that PEP has significantly promoted government environmental governance.This shows that government environmental governance is an important way for PEP to hinder the inflow of FDI of enterprises.
This paper takes the investment in industrial pollution source treatment per 10,000 yuan of total output value of industrial enterprises as a proxy variable of environmental regulation intensity.Data are obtained from the China Environment Statistics Yearbook.Seen from column (3) and (4) of table 8, the coefficient is positively significant at the 1% significance level, indicating that PEP significantly increases the intensity of environmental regulation.Therefore, the mechanism by which PEP hinders FDI by improving government environmental governance and environmental regulation is established.H2 is proved.

Expansive analysis
In order to further study the effect of PEP on FDI under the constraint of economic growth target, this study uses the GDP growth target value published in the government work reports as the proxy variable of economic growth target constraint, and constructs its interaction with PEP for regression.The results of columns (1)-( 2) of table 9 show that the coefficient of the interaction term is significantly positive at the significance level of 1%.The target of PEP in economic growth is significantly negative, and the direction and significance of the coefficient do not change after adding the control variables.This shows that the economic growth target constraint has a moderating effect on the impact of PEP on FDI, and the economic growth target weakens the negative impact of PEP on enterprise FDI.
To investigate the impact of PEP on FDI under the constraint of environmental objectives, this study sets up constrain variables (constraint) based on whether clear energy conservation and emission reduction constraint targets are proposed in local government work reports, and establishes its interaction with PEP.The results of columns (3)-(4) of table 9 show that the interaction coefficient is negatively significant at the 1% significance level.The coefficient of PEP is negatively significant, the environmental target constraint coefficient is positive significant, and the coefficient direction and significance do not change after adding the control variables.This shows that the public's environmental demands have a moderating effect on FDI under the constraint of environmental objectives, and the environmental target constraints enhance the environmental governance effectiveness of PEP.
In summary, the existence of economic growth targets will weaken the hindrance effect of PEP on FDI, while the existence of environmental constraint targets will enhance the hindrance effect of PEP on FDI.Therefore, H3 is validated.

Conclusions and policy implications
This paper studies the impact and mechanism of PEP on foreign direct investment.The results show that PEP has a significant negative effect on the FDI inflow of enterprises.This conclusion is still valid after multiple robustness tests and endogenous tests.There is obvious regional heterogeneity in the negative impact of PEP on corporate FDI.The hindrance effect is more obvious in eastern region, coastal cities and first-tier cities, and there is no obvious hindrance effect in the economically underdeveloped western region, inland cities and nonfirst-tier cities. PEP has a more direct inhibitory effect on FDI of non-SOEs and large-scale enterprises.The impact on FDI is greater in high-tech industries.The impact of PEP on FDI is inversely proportional to the degree of industrial pollution.Low-polluting industries are more affected, while high-polluting industries in remote suburbs are less affected.PEP has an impact on FDI by conveying information to the government.The economic growth target has a significant regulating effect on the impact of PEP on FDI, and the constraint of economic growth target increases the pressure of local governments to develop the economy, and weakens the inhibitory effect of PEP on enterprise FDI.Environmental target constraints have a significant moderating effect on the impact of PEP on FDI, indicating that environmental target constraints will strengthen the governance of local governments on environmental issues and enhance the impact of PEP on enterprise FDI.
The central government should accelerate the improvement of the governance system for PEP.It is necessary to actively guide the public to participate in environmental governance and promote the modernization of the government's environmental governance capacity.The government should promote environmental governance in a reasonable manner, and build a protective barrier for foreign investment in accordance with the law.Government departments should rectify environmental problems in an orderly manner, avoid adopting a 'one-size-fits-all' approach that leads to the rapid loss of foreign investment, and stabilize the development of foreign investment and foreign trade.The voice of the public should be listened to, and economic growth targets and environmental constraints should be reasonably formulated.The government should strengthen the relationship with the public.The formulation of environmental goals should be targeted and not blind.

Figure 1 .
Figure 1.The influence of public environmental demands on FDI transmission mechanism.

)
Calculate the entropy weight of kth indicator. å

Figure 2 .
Figure 2. The possible nonlinear relationship after adding a quadratic term.

5. 4 .
Heterogeneity test 5.4.1.Location selection 5.4.1.1.Regional heterogeneity The 30 provinces and cities are divided into eastern, central and western regions.The regression results are shown in table

5. 4 . 2 .
Nature of the enterprise 5.4.2.1.Enterprise ownership This paper uses the registration type and holding status code provided by the China Industrial Enterprise Database and divide the sample into state-owned enterprises (SOEs) and non-SOEs.The regression results are shown in column (1) and (2) of table

5. 4 . 3 .
The nature of the industry 5.4.3.1.Industrial technology content This paper divides the sample into high-tech industries and non-high-tech industries and the code is compared with the 2002 National Economic Industry Code.Sample of high-tech industry is screened out, and the rest are classified as non-high-tech industries.The regression results are shown in columns (1) and (2) of table 4. Methods and models4.1.ModelsTo test the impact of PEP on FDI, this paper constructs the benchmark regression model.i represents the province.t is the year.lnfdi it represents the level of FDI.score it is the agent variable of PEP.X it is the control variable.V h indicates the regional fixed effect (FE).V i is the industry FE. V t is the year FE, and e it is the error term.To mitigate the effect of inter-sample correlation, standard errors are clustered to the enterprise level in the benchmark regression model.In order to further explore the impact of PEP in FDI, the moderating effect models are constructed as follows.The explained variable FDI (lnfdi it ) is defined as the sum of Hong Kong, Macao and Taiwan capital and foreign capital in the paid-up capital of an enterprise, and is treated logarithmically.

Table 5 .
(2)erogeneity test(2).-value is used to test the significance of the difference in score coefficients between groups, which is obtained by Chow test. p
-value is used to test the significance of the difference in score coefficients between groups, which is obtained by Chow test. p