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The impact of financial openness on regional economic growth: the mediating role of foreign trade

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  • Liu, Shuang
  • Li, Yuchen
  • Huang, Kang
  • Zhao, Chunzi
  • Jin, Guangyi

Abstract

Based on provincial-level panel data from 2010 to 2022, this study examines the influence of financial openness on regional economic growth in China. The results demonstrate that financial openness significantly promotes economic growth, primarily mediated through the channel of foreign trade. Furthermore, the growth-enhancing effect is more pronounced in regions characterized by higher trade dependence and stricter environmental regulations. These findings underscore the importance of implementing differentiated financial opening policies tailored to local conditions, and highlight the synergistic role of complementary reforms in trade and environmental governance to maximize the benefits of financial openness.

Suggested Citation

  • Liu, Shuang & Li, Yuchen & Huang, Kang & Zhao, Chunzi & Jin, Guangyi, 2025. "The impact of financial openness on regional economic growth: the mediating role of foreign trade," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018537
    DOI: 10.1016/j.frl.2025.108599
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