Threshold Effect Of Financial Development On OFDI Reverse Technology Spillover In China

Since the adoption of reform and opening-up policy,China has continuously accelerated the pace of opening to the outside world and has achieved rich achievements in foreign investment.At present,it has become the second largest investor in the world.With the steady advancement of the “One Belt and One Road” strategy,China's foreign investment will be more convenient,and powerful companies will have stronger incentives to “go global”.Under such circumstances,China's foreign direct investment will have great development potential.With the continuous increase of outward direct investment flows,OFDI reverse technology spillover has gradually entered the field of vision of scholars.Domestic and foreign scholars have used various methods to study the existence of OFDI reverse technology spillovers effects and the Influencing factors of such effects.But scholars mostly study human capital,institutional distance,technical differences and other influencing factors,and have little attention to the influencing factors of financial development in home countries.However,there is no doubt that enterprises need to provide direct foreign direct investment with strong financial support.It is difficult to rely on the company's own funds for external investment,whether it can solve the problem of funds for overseas investment through external financing,and whether it can raise funds to learn and absorb OFDI spillovers technology,these are problems that must be considered when attempting to obtain reverse technology spillovers through outbound investments,and are closely related to the level of China's financial development.Based on this,the paper first reviewed the theoretical research on financial development and OFDI reverse technology spillovers,introduced the current status of China's financial development and OFDI and its reverse technology spillovers,and analyzed the theoretical impact of financial development on OFDI reverse technology spillovers.Then,this paper uses the provincial panel data of China's foreign direct investment from 2003 to 2012 to examine the threshold effect of China's financial development on OFDI's reverse technology spillover.First,based on Hansen's non-dynamic panel threshold model,the threshold model is set up from three aspects of financial development,they are financial size,financial efficiency and financial structure.Then the number of thresholds was calculated using the self-sampling method and the estimated threshold was calculated.Then,it was determined whether the estimated threshold was a real value.Finally,the regression coefficients of the model were calculated based on the threshold,and obtain the specific influence of the financial development on the reverse technology spillover of OFDI.In addition,in order to ensure the reliability of the model results,we also use the interaction item test method to test the stability of the estimation results.The research results show that the financial size and financial efficiency have a double-threshold effect,and the financial structure has a single threshold effect.Within the sample time period,China's financial size,financial efficiency,and financial structure have been continuously developed and optimized but only part of the financial development level has crossed the threshold that can promote the reverse technology spillover of OFDI.The financial development of some areas is below the threshold value,which results in less promotion of OFDI reverse technology spillovers.In addition,according to some theoretical studies,current situation and empirical process,corresponding policy recommendations are proposed in terms of financial size,financial efficiency and financial structure.