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Sustainability 2017, 9(6), 933; doi:10.3390/su9060933

An Empirical Research of FDI Spillovers and Financial Development Threshold Effects in Different Regions of China

1,2
and
1,2,*
1
School of Humanities and Economic Management, China University of Geosciences, Beijing 100083, China
2
Key Laboratory of Carrying Capacity Assessment for Resource and Environment, Ministry of Land and Resources, Beijing 100083, China
*
Author to whom correspondence should be addressed.
Academic Editor: Fabio Carlucci
Received: 16 March 2017 / Revised: 25 May 2017 / Accepted: 31 May 2017 / Published: 2 June 2017
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
View Full-Text   |   Download PDF [4716 KB, uploaded 2 June 2017]   |  

Abstract

Based on a comprehensive review of previous studies about the threshold effects of financial development on the process of foreign direct investment (FDI) spillovers, the present work roundly measures the financial development from the aspects of scale, structure, and efficiency and applies a multiple threshold regression model to estimate the threshold effects of financial development on FDI spillovers, and then examines the inherent relationship between FDI spillovers effects and the financial development from the three aspects, respectively, in different regions of China, based on regional panel data from 2000 to 2014. The results revealed that there are two thresholds of financial development scale, structure and efficiency, existing in the FDI spillover processes in different regions. The FDI spillovers effects are greatest in the eastern region and are generally smallest in the western region. There is a negative correlation between FDI spillovers effects and the financial development scale or efficiency in eastern and central region. Moreover, there is positive correlation between FDI spillovers effects and the financial development structure in eastern and central region. Additionally, there is a positive correlation between FDI spillovers effects and the financial development scale, structure, or efficiency in western region. The capital, labor, and regional technology progress have positive effects on economic growth in different regions and the effects of financial development on economic growth are not unanimous in each region. Based on the empirical results, some policies on how to develop regional finances and how to introduce FDI to promote economic growth are recommended. View Full-Text
Keywords: FDI spillovers; financial development; threshold effects; multiple-threshold regression model; different regions of China FDI spillovers; financial development; threshold effects; multiple-threshold regression model; different regions of China
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Wang, H.; Liu, H. An Empirical Research of FDI Spillovers and Financial Development Threshold Effects in Different Regions of China. Sustainability 2017, 9, 933.

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