Financial Market Development、FDI And The Economic Growth

As we had an increasing number of foreign direct investment in recent years, FDIspillover is getting more and more important. After World War II, some scholars had astudding in the financial perspective of foreign direct investment spillover effects oneconomic growth of the relevant literature. It shows that the effects of absorption ability ofeconomic growth have some basic conditions, including the degree of education, a soundlegal system, and a stable social environment. Financial development is an importantelement to promote economic growth; it is also a key factor in the process of FDI spillover.There are so many scholars studying on it, while most of the research has a focus on theoverall development level of our country, the study on a specific region is relatively small.This paper has a study on Shandong province, exploring the role of financial factor inShandong economic growth. The author considers that it will be more convincing if we puta study in Shandong province.This paper has six parts. The first part has a review on the economic growth in foreigndirect investment spillover, making a description on the financial statement, FDI spilloverand the economic development. On the basis of empirical analysis, we make a conclusionthat the financial market has an important role on the economic development. In order toanalyze the problem comprehensively, the paper makes a divide on the17cities ofShandong province which is classified by the level that the area developed and differencesof the financial markets. There are some differences on the study on the whole Shandongprovince. FDI effect is more outstanding in the relatively developed areas, and a soundfinancial system can increase the regional foreign direct investment spillover effect on theeconomic. Therefore, there are some corresponding policy recommendations, we must takeactive measures to improve and perfect the financial market to upgrade the whole level ofeconomic.