The Empirical Research On The Threshold Effect Of FDI On Economic Growth Of The Yangtze River Economic Belt

Along with our country economy gradually stepped into the new normal,the strategy of the Yangtze River economic belt has become a national strategy.To promote the urban agglomeration construction of Yangtze river economic belt has important significance.Since China’s reform and opening up,the Yangtze river economic belt urban agglomeration has been attracting into much FDI.Numerous studies have shown that the two sources of FDI promoting economic growth is the capital complement and technology spillover.For the three urban agglomerations of the Yangtze river economic belt,in this paper,due to the discrepancy of regional conditions such as human capital level,financial development level,the economic growth effect of FDI might also is not the same,blindness in attracting foreign investment might not promote economic growth,even have adverse effects on economic growth.Based on the above assumptions,this paper reviews the theories and literature related to FDI and economic growth.And after detailed analysis and comparison of the current situation of FDI and economic growth of the three urban agglomeration,this paper illustrates threshold mechanism of human capital and financial development to the FDI effect on economic growth respectively.Based on Hansen’s dynamic threshold panel model,this paper build the threshold model of human capital and financial development respectively using the 2001-2014 panel data of 70 cities of the Yangtze river economic belt urban agglomerations to test the threshold effect existence of human capital and financial development,and then examine the threshold variable to estimate the authenticity and the regression,so as to find influence of FDI on economic growth within the different scope of threshold.Finally,this research compared the real human capital and financial development level of the three urban agglomerations and nine core city in 2014 with the estimated threshold value to determine the present human capital and financial development condition of the urban agglomeration with the purpose of adjusting measures to local conditions in introducing foreign capital.The research results show that: 1.Both developments of the FDI and economic growth situation of the urban agglomerations on Yangtze river economic belt are unbalanced,and the Yangtze river delta urban agglomeration’s advantage of FDI and economic growth continues to enhance,the FDI gap between Chengdu-Chongqing urban agglomeration and urban agglomeration in the middle reach of Yangtze river is disappearing,but the economic development gap is widening.2.The human capital threshold and financial development threshold of effect of FDI on economic growth really exist of the urban agglomeration on Yangtze River economic belt.Human capital shows triple threshold effect.When the level of human capital is lower than estimated threshold value,the regression coefficient of FDI is negative;When the human capital level is higher than the low threshold value,the regression coefficient of FDI turns into positive,which suggests that the effect of FDI on economic growth changes from negative to positive.Financial development shows a double threshold effect.When the financial development level below the high threshold value,the regression coefficient of FDI is negative,which means that FDI has no promoting effect on economic growth;When financial market development level higher than high threshold value,the regression coefficient of FDI become positive and larger,which suggests that financial development level makes FDI from restraining economic growth to promote economic growth.3.In 2014,the human capital level and financial development level of three urban agglomerations did not cross the threshold value,Which illustrated the effect of FDI on economic growth was not significant.Finally,according to the research conclusion and actual economy development situation of the Yangtze river economic belt,this paper briefly put forward four suggestions of FDI promoting economic growth,and the future research direction was prospected.