Study On The Influencing Mechanism Of Financial Services FDI Upon The Economy Of Developing Host Country

Since the 1990s, there is an important trend for the global foreign direct investment, which fastly flows to the financial sector of emerging developing countries. Financial services FDI has exerted a profound impact on financial industry of developing countries, accordingly, the theoretical research on financial services FDI has gradually becoming one of concerned issues, and scholars from the field of international economics also pay more attentions to it. According to the existing literature, however, the study on financial services FDI basically focus on the decision-making factors and financial industry effects, but scholars pay little attentions to the effects of macroeconomic development of host country. Based on the background, this article attempts to systematically study the influencing mechanism of financial services FDI on the host country economy by the method of theoretical analysis and empirical study, and enrich the research achievements in this field, make up the insufficient about the theme.The construction of this dissertation is formed as follows:The 1st chapter mainly introduces the background, significance, innovation and the structural arrangement on this paper. From microcosmic, medium and macroscopic levels, this paper review and appraise the relevant literatures on the relations between financial services FDI and host economy in the 2nd chapter. By using descriptive approach, the 3rd chapter explores the trend of the financial services FDI which flows to the emerging countries, furthermore, analyses its characteristic and influence on the host country. The 4th and 5th chapter conducts the theoretical analysis and empirical test for the influencing mechanism of financial FDI on the host economy. In the 4th chapter, on the basis of emphasizing the difference between financial sector FDI and non-financial sector FDI, this paper constructs a mechanism framework which financial services FDI influence the host country macroeconomy. In this framework, the research on FDI-growth and finance-growth is integrated into the same system, and formed the causal chain among the financial services FDI, the financial development and economic growth. There are two category mechanism which financial services FDI impact host economic growth:direct mechanism and indirect mechanism. Direct mechanism emphasizes various channels which financial services FDI promotes host economic growth through the improvement of financial market and development. Indirect mechanism emphasizes the various channels which financial services FDI strengthens other external factors which influence the economic growth through the improvement of financial market. Using the panel data model, the 5th chapter empirically tests the capital mechanism, the efficiency mechanism, signal mechanism and strengthening spillover mechanism respectively. Empirical results show that:firstly, the financial services FDI overall helps to promote economic growth in developing host countries. By promoting competition, spillover, and institutional improvment, financial services FDI improve the host country's financial efficiency and stability. The financial system which is effective and robust can improve the stable capacity of credit supply, improve corporate governance and institutional construction, continually attract other entities industrial capital inflow or trade, thus enhance the capital formation and productivity, and eventually promote macroeconomic growth. Secondly, there is regional difference on the growth effect of financial services FDI, this show that the growth effect of financial services FDI depends on the perfect financial regulatory framework of host country, on the other hand, depends on the endowment conditions of host country. Finally, the 6th chapter summarize the main conclusion, and according to the features of China's financial industry FDI, this paper put forward some policy suggestions.The innovation for this article mainly includes:Constructing the analysis framework of influential mechanism on financial services FDI to host country economy, and using panel data model to test the mechanism empirically; Analysing the difference among regions and its constraints; Identifing the importance of various mechanisms, and the efficiency is the most core mechanism.