Abstract:Taking financial development as a threshold variable, using the provincial panel data of 31 provinces and municipalities from 2001 to 2015, this paper studies the non-linear relationship between foreign direct investment(FDI) and poverty reduction by using the static panel data threshold model. The results show that under different levels of financial development, the effect of FDI on poverty reduction is different, and there is a double threshold effect. When the level of financial development is low, FDI has a positive correlation with poverty reduction. When the level of financial development is relatively high, FDI has a negative correlation with poverty reduction. This nonlinear relationship is also different in different regions. The threshold value in the east is higher than that in the central part, and there is no threshold effect in the west. The effect of FDI on poverty reduction in the west is higher than that in the east and central parts.