Research on the Spatiotemporal Evolution Characteristics and Capital Driving Factors of Sustainable Economic Development in Northwest China

Junfeng Liu, Shiwen Wang, Jianwen Ji (), Zizhen Chen and Shengyu Li
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Junfeng Liu: School of Business, Suzhou University of Science and Technology, Suzhou 215009, China
Shiwen Wang: School of Business, Suzhou University of Science and Technology, Suzhou 215009, China
Jianwen Ji: School of Economics, Nankai University, Tianjin 300071, China
Zizhen Chen: School of Business, Suzhou University of Science and Technology, Suzhou 215009, China
Shengyu Li: Postdoctoral Research Station, Suzhou International Development Group Co., Ltd., Suzhou 215301, China

Sustainability, 2024, vol. 16, issue 23, 1-17

Abstract: Frontier research has focused more on the sustainable economic development (SED) of developing countries, with slightly less attention paid to the SED of underdeveloped regions in developing countries, especially without analyzing their driving factors from the dual perspectives of domestic and international capital. In fact, as an important factor in economic growth, capital is also the core driving force for achieving SED. This paper takes the five provinces (autonomous regions) of northwest China (NC) as a case study based on unbalanced panel data from 26 cities from 2000 to 2020 and employs the dynamic degree and MSAR model to analyze the spatiotemporal evolution characteristics of SED; the results indicate that the SED of NC exhibits an irregular pattern overall, the differences between provinces at the same time point are relatively small, and the same applies to prefecture-level cities. The spatial agglomeration characteristic of SED in NC is evident, with significant room for improvement. Additionally, this paper evaluates the impact of capital on the SED of NC through the two-way fixed effects model and the mediation effect model and finds that foreign direct investment (FDI) inflows have a “first-rising-then-declining” impact on the SED of NC, while financing constraints (FC) play a promoting role in the SED of NC. Furthermore, FDI inflows subsequently impact the SED of NC by affecting regional FC, with FC acting as a mediating variable in the influence of FDI on the SED of NC. In terms of policy implications, NC should make rational use of FDI, control the pace of easing FC, and precisely promote the SED of NC from a capital-driven perspective. Other underdeveloped areas in developing countries can take this as a reference to promote SED.

Keywords: sustainable economic development; capital driven; foreign direct investment; financing constraints; global economic situation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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