Abstract: China’s Two-way FDI has developed simultaneously at a large scale in recent years,which has important impacts on China’s economy and world economy.OFDI has grown quickly in a short term after China utilized IFDI for nearly 30 years. It is significant to sum up China’s experience and principles under China’s two-way FDI development by analyzing the mechanisms of IFDI’s influence on OFDI. This paper constructs some absolute and relative indicators of China’s financial development.Based on bilateral FDI stock panel data between China and 188 economies from 2003 to 2015 and by using Partial Inventory Adjustment model,we analyze the influence of financial development on China’s two-way FDI development and the influence of China’s inward FDI on its outward FDI.The results show that China’s financial size expansion such as loan size per person have significant effects on China’s two-way FDI Development. Financial structure improvement such as credit-gain ability of private sector and financial efficiency such as direct finance fraction have also been beneficial to China’s two-way FDI development; Inward FDI is in favor of outward FDI; the effect of FDI inflow on the promotion of China’s OFDI is relative to China’s financial development.
Key words: inward FDI; outward FDI; financial factor
The Chinese version appeared in Fudan Journal, 2018(06).