Money Laundering,FDI And Economic Growth

As the global economic development and economic exchanges between different countries are increasingly close,the global market has gradually formed a world of goods,services,and capital markets.Foreign Direct Investment(FDI)has become an important way of the economic development and the main driving force of the economic globalization.The world investment report of 2017 expects that the FDI will increase to $1.85 trillion in 2018.However,a lot of FDI will be accompanied by a lot of money laundering crimes.The increasing number of money laundering is along with a rising of crime rates and crime groups that will cause serious influence on economic development and social stability.Under this background,it is of great significance to study the impact of FDI on economic growth through the perspective of money laundering.Based on panel data of 56 countries from 2000 to 2015,this thesis firstly discusses the effect of FDI on economic growth considering the money laundering,and the threshold variables are opening degree(Open),financial development level(FD)and the country corruption(Corru).And then the thesis studies how FDI affects economic growth by analyzing the threshold effect of attraction of money laundering(attr).It aims to provide support and basis for the formulation of FDI policies and anti-money laundering policies.In general,the conclusion is as follows,(1)in model with the threshold variables of Open,FD and Corru,FDI has obvious threshold effect on economic growth.The results are also significant after adding the money laundering factor.The fitting degree is higher,and the conclusion is more consistent with the basic expectation.It is shown that money laundering is also an important factor affecting the influence of FDI on economic growth.(2)in the examination of FD as the threshold,focusing on all countries,when FD is below the threshold of financial development,FDI has a negative effect on economic growth,and money laundering factor is the driving force.When FD is above the threshold,FDI shows a positive driving effect on economic growth,and the money laundering factor acts as a hindrance.In the examination of corru as the threshold,it is found that when the corruption control index is in a certain range,the money laundering has a positive effect on economic growth.Otherwise,the money laundering will reverse the economic growth.(3)in three threshold analysis tests,with reality data calculation,the money laundering factors have harmful effects on the growth of national economy,and in a relatively stable slowly rising,and the harm to economic growth in the developed countries is more critical than developing countries.(4)in the examination of attr as the threshold,the influence of FDI on economic growth is significant in a “inverted u-shaped” double threshold effect.And the nonlinear relationship appears differently in developed countries and developing countries.The number of countries which are at high level of the attraction of money laundering increases year by year,but the number of countries which are at optimal level decreases within the past few years.Thus,the risk of international money laundering level is relatively high.In recent years,there is none developed country at optimal level of the attraction of money laundering.It is mainly the developing countries that have a relatively low level of the attraction of money laundering,and the reason is that the national economy development of those countries is low.The supervision of anti-money laundering still needs to be reinforced.In China,the attraction of money laundering increases year by year with the development of economy and now,it is at high level stage.We should intensify the supervision of anti-money laundering to control the attraction of money laundering,and then promote the effective increase of the FDI influence on economy.