IDEAS home Printed from https://ideas.repec.org/a/spr/weltar/v161y2025i3d10.1007_s10290-024-00581-1.html
   My bibliography  Save this article

The role of digital finance on FDI inflow: facilitator or inhibitor?

Author

Listed:
  • Min Jiang

    (Nanjing XiaoZhuang University)

  • Wei Zhou

    (Suzhou University of Science and Technology)

  • Jiani Zong

    (China Foreign Exchange Trade System,)

Abstract

Digital finance, as an innovative form of financing, has a distinct impact on FDI inflows compared to traditional finance. This paper provides a theoretical analysis of the impact of digital finance on FDI inflows from both supply-side and demand-side perspectives. Based on data from prefecture-level cities in China, this study reveals the significant role of digital finance in facilitating FDI inflows. The advancement of digital finance not only enhances financial market efficiency and attracts FDI through its financial effects but also stimulates regional innovation, entrepreneurship, and consumer spending, resulting in increased FDI inflows due to its economic effects. The comparative analysis suggests that traditional financial development impedes FDI inflows and fails to attract FDI through financial and economic effects. The different roles of these two forms of finance may be attributed to their distinct contributions in promoting financial development and the varying stages they are currently in.

Suggested Citation

  • Min Jiang & Wei Zhou & Jiani Zong, 2025. "The role of digital finance on FDI inflow: facilitator or inhibitor?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 161(3), pages 1113-1138, August.
    • Handle: RePEc:spr:weltar:v:161:y:2025:i:3:d:10.1007_s10290-024-00581-1
    DOI: 10.1007/s10290-024-00581-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10290-024-00581-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10290-024-00581-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:weltar:v:161:y:2025:i:3:d:10.1007_s10290-024-00581-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.