The Journal of Economics, Marketing and Management (융합경영연구)

International Convergence Management Association (국제융합경영학회)
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The Impact of Financial Development Levels in Belt and Road Countries on Chinese FDI

  • Yuantao FANG (Department of Business, Ningbo University of Finance and Economics) ;
  • Renhong WU (College of Economics, Guangdong Ocean University) ;
  • Md. Alamgir Hossain (Department of Management, Hajee Mohammad Danesh Science and Technology University) ;
  • Xu LI (College of Business Administration, Henan Finance University)
  • Received : 2024.08.25
  • Accepted : 2024.10.30
  • Published : 2024.10.30
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Abstract

Purpose: As globalization continues to advance, China's trade cooperation with foreign countries has become increasingly close, and its outward-oriented economy has entered a rapid development stage. With the launch of the Belt and Road Initiative in 2013, favorable conditions for China's overseas direct investment have been created. This paper is based on the financial development in Belt and Road countries. Research design, data and methodology: Using panel data from 2006 to 2020 covering 64 countries along the Belt and Road, the paper classifies regions and compares regions with higher levels of financial development. It provides descriptive statistics and employs the Fixed Effects Model (FEM) for regression analysis to thoroughly study the factors affecting China's Foreign Direct Investment (FDI). Results: The research results indicate that the size, efficiency, and structure of financial development all have a significant positive impact on China's FDI. Conclusions: However, factors such as trade openness (OPEN) and per capita disposable income (LnAGDP) did not pass the significance test, possibly because the level of openness of a country for outward foreign direct investment is not a significant factor to consider. Finally, based on the empirical findings, a series of policy recommendations are proposed to enhance China's FDI levels.

Keywords

Acknowledgement

Funded by the Development Research Center of Ningbo Municipal People's Government, Project Number: J24-W27-B.

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