Research on multiple dimensional driving mechanisms of RMB internationalization based on the VAR model

The development of RMB internationalization marks the rise of the comprehensive national strength and global influence of China. According to the panel data from 2020 to 2024, this paper constructs a standard vector autoregression (VAR) model to comprehensively and systematically discuss the nonlinear transmission path of RMB internationalization under the three-dimensional collaborative framework which composed by “trade - investment - exchange rate”. First of all, the long-term equilibrium relationship among variables is analyzed through the unit root test and cointegration test to ensure the stability and co-integration of data. Additionally, all variables of the same order that have stabilized are used to select the optimal lag order according to the AIC and other criteria to estimate a VAR model, and the Granger causality test is used to adopted the interaction and influencing mechanisms. Moreover, the impulse response function (IRF) and variance decomposition (VD) techniques are used to capture the dynamic impacts of each factors of RMB internationalization in depth. Based on the empirical results, this paper eventually proposes suggestions that constantly strengthen the linkage basis of “real economy and currency use”, maintain the synchronized advancement of RMB use and depth of financial openness and further improve the market-oriented reform of the RMB exchange rate.