Theoretical And Empirical Analysis On The Impact Of Financial Development On China's Ofdi

Outward foreign direct investment is becoming an important part of economic activities,especially the outward foreign direct investment of enterprises is becoming more and more important in enterprise development strategy as an important expansion mode for enterprises.In recent years,China's foreign direct investment has made a great progress in both the flow and the stock.In particular,China surpassed Japan in 2015 as the second largest country after the United States,with an outward direct investment outflow of $1.47 trillion,increased 11.8%one year.In this context,the research of outward foreign direct investment has been the focus of more and more scholars.The level of economic development,economic openness and income level of a region may affect the outward foreign direct investment in the region,and the outward direct investment of foreign direct investment may affect the economic development level,economic openness and income level of the region.On the other hand,the domestic financial market also tends to improve and mature in the process of development,and the bank credit market,bond market and stock market are all learning from the international advanced experience and combining their own characteristics with rapid growth and development.This paper studied the influencing factors of outward foreign direct investment from the perspective of financial market development,which is a reference to the continuing development and structural optimization of China's outward foreign direct investment.This paper studies how financial development affects China's outward foreign direct investment from theoretical and empirical perspectives.In the theoretical part,firstly,financial development affects the outward direct investment in two channels,financing management and risk control;Secondly,we used the "double gaps" model of Hollis B.Chenery,which are financial support gap and policy support gap,explaining the enterprises' outward foreign direct investment;Finally,we tried to explain how financial development affects China's outward foreign direct investment.We mainly considered two major aspects about financial development:financial scale and financial structure.The financial scale also shows two points,the increase of financial resources and the financial degree;Financial structure is divided into financial structure optimization and financial resource allocation efficiency.In the empirical part,we established a panel data of provinces in China from 2004 to 2015,using the stock of China's outward foreign direct investment,the level of financial development,economic openness,the level of foreign direct investment,innovation,the level of savings and state-owned enterprises as variables,and establishing five empirical models according to different measures of financial development.And it got through a HAUSMAN test.We founded that financial scale and financial structure both have significant positive effects on China's outward foreign direct investment,and the state-owned enterprises also have a great influence on outward foreign direct investment.In addition,considering the regional differences in China,we divided all provinces in China into three regions,east,middle and west.The empirical results showed that financial development was still significant and the symbol of coefficient was consistent with the results before,but it still showed some differences,which was both financial scale and financial structure suggested that financial development has effect on outward foreign direct investment in east middle and west.And the result got through the robustness test which means the result has high credibility.