Research On The Impact Of Financial Development On OFDI's Industrial Structure Adjustment Effect

As the core of modern economy,Finance plays an important role in the real economy and the adjustment of industrial structure.China's financial development has experienced the early market to plan and tortuous process from plan to market,having formed multi-level financial structure of the financial system:the central bank in monetary market as the center and capital market and the foreign exchange market as complementary,enhancing the financial function,providing a variety of financing channels for the real economy development.In addition,OFDI which is an important way of industrial structure adjustment,with The Belt and Road initiative to promote,continues to expand the scale and becomes important ways to relieve excess capacity,promote advantage of spare capacity output and realize the industrial structure adjustment.Therefore,based on the situation of China's financial development and the experience of foreign direct investment,it is particularly necessary to investigate the impact of financial development on the restructuring effect of the OFDI industrial structure of the investment country.The research on the impact of financial development on the adjustment effect of OFDI industrial structure is mostly based on the perspective of developed countries or host countries,while the research on the effect of financial development on the financial development of developing countries or investment countries is very few.In ddition,from the research content,it is found that financial development plays an important role in the adjustment effect of OFDI industrial structure,but a theory that does not form a complete system.Through the review of relevant literature,the financial development on the direct and indirect effects of OFDI industrial structure adjustment through three mechanisms,such as capital supply,capital orientation and industrial integration.In order to further investigate the impact of financial development on the adjustment effect of OFDI industry structure,the paper uses data from 1982-2016 based on VAR model to bulid VECM to test the relationship between China's financial development level and the effect of OFDI on industrial structure adjustment empirically.The regression results show that the role of OFDI in industrial restructuring depends on the level of domestic financial development.Among them,the scale of financial development has a positive effect on the adjustment of OFDI industrial structure,while the financial efficiency led by banks will hinder the adjustment of OFDI industrial structure.According to the pulse effect and variance decomposition analysis,with the passage of time and under the action of external shocks,financial development level of the variable's contribution to the OFDI industrial structure adjustment effect always maintain high proportion.This means that the transformation and upgrading of industrial structure will be more and more big in the next 10 years.Theoretical and practical studies have shown that China should continue to play the role of finance in OFDI industrial structure adjustment.Firstly,through OFDI,we continue to expand international cooperation space,actively developing strategic emerging industries;Secondly continue to improve our financial market system,actively widen the financing channels of different market main body,to reduce the financing constraints;Thirdly Strengthen financial innovation and enhance the capability of financial services in the real economy;Finally,we should strengthen international financial cooperation and expand the space of China's OFDI.