Research On The Impact Of Financial Development Differences On Foreign Direct Investment In China

In recent years,some foreign capital withdrawal incidents,coupled with changes in the global investment and trade environment,make people think that China's "foreign capital withdrawal tide" has aroused people's concern about the introduction of FDI in China.Foreign direct investment is an important driving force of China's economic development.In the critical period of economic transformation and economic restructuring,we still need to do well in guiding high-quality foreign investment and efficient utilization of foreign capital.Among the factors that affect the inflow of foreign direct investment,the financial development of a country has direct and critical role in foreign direct investment,whether it is a host country or a host country.In many researches on the analysis of financial development and foreign direct investment relationship,most scholars are separately examine the impact of financial development in the host country investment or foreign direct investment,and financial development differences between the host country and few scholars study on the investment of foreign direct investment effect,so choose the angle to study its effect on foreign direct investment,can not only enrich the theory of foreign direct investment,but also to understand the present situation of financial development in China,and the introduction of foreign direct investment in the face of the scale and structure of the existence of what kind of influence has certain practical significance.Based on the related research theory at home and abroad,the influence mechanism of the financial development difference between the investment countries and the host countries is obtained according to the influence path of the financial development of foreign direct investment.Based on this theory,the panel data of the 39 countries and the land areas in the world for 1997-2016 years are used respectively.Three aspects of the financial regulation difference,financial structure difference and financial stability are used to do empirical research with fixed effect model.Considering the continuity of foreign investment,the dynamic panel data is estimated by System-GMM for robustness analysis.The empirical results show that the differences of financial scale,financial structure and financial stability have significant negative effects on FDI in China,and the negative effects of financial structural differences are most obvious.This shows that there are still widespread financial restraining phenomena in our country,and there are still great differences in financial development compared with the mature financial system,which,to a certain extent,inhibits the inflow of foreign direct investment in China.Based on the empirical results,we put forward some suggestions on China's financial deepening reform and the policy of guiding foreign direct investment inflow,in order to attract high quality foreign capital inflow and further promote the development of China's economy.