The Relationship Between Fdi Inflows,Financial Development And Green Total Factor Productivity

Since the "Belt and Road" initiative was launched two years ago,China has successively proposed a number of measures to improve the program and increase its attractiveness.These measures include emphasizing the green development of the "Belt and Road" and the release of the "Belt and Road" Green Investment Principles which have the aim of promoting sustainable economic development.The “Belt and Road” involves several countries with high population densities,making the initiative carry huge investment and development potential.While the “Belt and Road” attracts more and more external investment inflows,it also brings greater environmental pollution concerns.The financial development of a country is strongly related to the role of financial intermediaries.These can effectively diversify investment risks,optimize resource allocation,promote technological progress,accelerate industrial structure adjustment,transformation and upgrading,and promote economic growth.This paper uses the GML index based on the SBM directional distance function to measure the current status of the Green Belt and Road's Total Factor Productivity(GTFP),as well as its development trends and regional differences.Next,we use panel data from 1995 to 2014 to construct a measurement model between financial development,FDI,and GTFP.The results show that: 1)Green TFP in the countries along the “Belt and Road” showed an average annual growth rate of 3.92% across the sample period,with a declining growth rate;2)During the sample period,financial development and FDI had a significant inhibitory effect on GTFP;3)Financial development cannot effectively alleviate the negative spillover of FDI on domestic GTFP;and 4)This negative development is more pronounced in Asian countries,indicating that nations with less developed financial systems find it harder to benefit from FDI.Finally,this work puts forward some policy suggestions based on the research results.