Research On The Impact Of Financial Development On Outward Direct Investment In Shandong Province

In recent years,China's foreign direct investment has developed rapidly.Against this background,Shandong Province,as China's largest economic province and coastal trade province,also actively encourages enterprises to make direct foreign investment.Foreign direct investment is affected by various factors such as the economy,openness,and system of a region.Finance,as an important part of the economy,provides financial support for enterprises' direct foreign investment,which has an impact on Shandong's foreign direct investment.In recent years,with the promotion of related economic policies issued by Shandong Province,the level of financial development has been continuously improved,and the scale of financial development has expanded rapidly.The development of the banking,securities,and insurance industries has significantly improved,and in-depth promotion of local financial reform has made local financial development more dynamic.However,the financial development of Shandong Province still has problems such as the uneven development of the peninsula blue economic zone and the non-peninsula blue economic zone.This article analyzes the impact of financial development on Shandong's foreign direct investment from both theoretical and empirical perspectives.In terms of the theoretical mechanism,it is first analyzed that financial development can affect the company's outward direct investment through direct and indirect channels such as financing constraints,risk control,and improvement of enterprise productivity and technology.Secondly,it analyzes the mechanism of financial development scale,structure and efficiency that affect foreign direct investment.On the basis of theoretical analysis,a fixed effect model is established for empirical analysis.The panel data of 17 cities in Shandong Province from 2006 to 2017 were selected,and the entropy weight method was used to objectively assign weights to financial development indicators to calculate the overall level of financial development in Shandong Province.In addition,financial development is divided into financial development scale,financial development efficiency,and financial development structure,and the impact of the overall financial development level andfinancial development scale,efficiency,and structure on foreign direct investment in Shandong Province is studied.On this basis,due to regional differences in financial development and foreign direct investment in Shandong Province,Shandong Province is divided into a peninsular blue economic zone and a non-peninsular blue economic zone for sub-sample regression,and the regional differences in financial development affecting foreign direct investment are studied..The results show that the overall level of financial development significantly promotes foreign direct investment in Shandong Province.In addition,the scale,efficiency,and structure of financial development have a positive effect on foreign direct investment.The regression results of the peninsular blue economic zone and the non-peninsular blue economic zone show that the impact of financial development on the peninsular blue economic zone is greater than that of the non-peninsular blue economic zone.Finally,R & D investment was added as a control variable for robustness testing,and the conclusions were consistent.On the basis of research,in order to better play the role of financial development in promoting foreign direct investment in Shandong Province,we propose to optimize the layout of financial space,deepen financial reform,improve the efficiency of financial market development,improve the capital market,optimize the structure of financial development,and continue to expand Policy recommendations.The innovation point of this paper is to use the entropy weight method to select financial indicators to calculate the financial development level when measuring the level of financial development?Based on the analysis of the impact of overall financial development in Shandong Province on foreign direct investment,regional differences in financial development in Shandong Province are considered.The differences in financial development between the Shandong Peninsula Blue Economic Zone and the non-Peninsula Blue Economic Zone are analyzed.