The Pollution Haven Hypothesis and the Linder hypothesis are traditionally independent, but both involve location selection of multinational firms. For multinationals producing high-quality products, the location selection of their foreign direct investment needs to balance the pollution haven effect and Linder effect. Adopting the data of foreign enterprises in Chinese industrial enterprises database and constructing a new environmental regulation index and quality demand structure index, this paper tests the Pollution Haven Hypothesis and Linder hypothesis. Based on conditional logit and nested logit, the empirical results show that both hypotheses are true for foreign firms that produce high-quality products. The intensity of environmental regulation has a significant negative impact on foreign firms in high-polluting industries, while income per capita and product quality demand structure have a significant positive role in attracting high-quality foreign companies.