Research On Effect Of Financial Development On OFDI

After 40 years of rapid development of reform and opening up,China's economy has changed from high-speed growth to high-quality development,and is in the new normal stage of transforming the mode of economic development,optimizing the economic structure and transforming the driving force of economic growth.And foreign investment is an important way for China to participate in global resource allocation and promote domestic economic restructuring.Since 2000,China has accelerated the implementation of the “going out”strategy,and foreign direct investment has entered a period of rapid development.It has now become the third largest foreign investment country.However,foreign direct investment of enterprises needs strong capital guarantee.It is difficult to carry out foreign investment only by free capital of enterprises.Whether or not the problem of enterprise capital can be solved through external financing has become an important factor affecting the development of OFDI in China.How to promote the development of OFDI in China has become an important issue affecting this field.Firstly,this paper combs the related theories and research of OFDI and financial development,summarizes the current situation and characteristics of China's OFDI and financial development,and analyses the mechanism of financial development affecting OFDI from the theoretical level.Then this paper measures the concept of financial development from three aspects of financial development: financial scale,financial structure and financial efficiency.On this basis,through regression of provincial panel data from 2004 to 2017,it empirically studies how the three dimensions of financial development indicators affect the development of OFDI in China.In view of the imbalance of regional development in our country,we divide our country into eastern and central and western regions to further construct an empirical model for comparative analysis,and examine the impact of financial development on OFDI at different levels of economic development.Finally,according to the empirical conclusions,the paper puts forward countermeasures and suggestions.