Government Capabilities,Interest Groups And Offshore Financial Development

As a major innovation in the evolution of the financial industry,offshore finance has become an important hotspot for countries to enhance their financial competitiveness by developing offshore financial services and building their offshore financial markets.Throughout the development of global offshore finance,this is inseparable from the policy guidance of a government.The establishment and development of offshore financial centers are the requirements of the host government to comply with the era of economic and financial global integration,through a series of policies.Means,driven by mandatory institutional changes.Interest groups,as a non-negligible factor in the government's decision-making process,should also be included in the research scope of offshore financial development.This article starts from two perspectives of government capacity and interest groups,and explores the institutional factors that affect offshore financial development.After reviewing the domestic and foreign literatures,this paper analyzes the status of the government's capabilities and interest groups in the global financial centers,and further proposes the research hypothesis.The panel data of 50 countries and regions from 2001 to 2016 were selected for empirical analysis.We found that:First,the government capability of a country has a significant impact on the development of its offshore finance.The stability,bureaucracy quality,law and corruption of a country or region are all important factors that affect the development of offshore finance.Among them,the bureaucracy quality is the most prominent.Secondly,the strength of financial interest groups has a significant negative impact on the development of offshore finance.Domestic interest groups have the motivation and ability to hinder the development of offshore finance in order to maintain their interests.Finally,the improvement of government capabilities can weaken the negative impact of interest groups on offshore financial development.In addition,the paper also finds that among other factors affecting offshore financial development,the level of economic development and income level have a good driving effect on offshore financial development,and the impact of per capita income level on offshore financial development is particularly significant;From the perspective of geographical characteristics,island countries,as an innate location feature,have unique advantages in the development of offshore finance;Finally,on the basis of the research results,it is proposed to promote the development of Chinese offshore finance by improving the governments capabilities building,and weakening the strength of financial interest groups.