Regional Differences Of The Relationships Between Exports, FDI And Economic Growth In China

The researches on relationships between exports, foreign direct investment and economic growth have long been a central theme in the trade and development literature. Some researches on newly industrialized economics suggest that export and foreign direct investment may directly affect factors determining economic growth and then contribute to economic development indirectly. With the reform and opening policy, China has witnessed a rapid economic growth with GDP soar up to 102,398 hundred million yuan in year 2002 from 4,517.8 hundred million in 1978, and the economic growth of China is accompanied by the huge export and FDI inflow. To China's economic growth, the contribution of export and foreign direct investment have been affirmed by some researches. But China's economy is characterized by a regional dualistic development pattern and structural divergence. Based on that, recent researches engaged in investgating the relationship between export, foreign direct investment and regional economic growth in China. A general conclusion on this subject is, the relationship between export, foreign direct investment and economic growth may be different cross different economic zones. As a matter of fact, the reason of different performance of export and foreign direct investment in China can be complicated. Restricted by many factors, export and foreign direct investment may contribute to economic growth differently in different countries. This paper engened in investigating channels from which export and foreign direct investment may affect economic growth under a endogous growth framework. Then this paper made empirical researches on relationship between export, foreign direct investment and economic growth and put forward explaination.This paper can be separated into three parts,The first part is researches on channels export and foreign direct investment may contribute to economic growth. Existing literatures have been reviewed in this part. Based on literature review, a framework summing-up channels export and foreign direct investment may contribute to economic growth has been put forward.The second part is the empirical research on relationship between export and economic growth. Cointegrated Vector Auto-regression model (VECM, Vector Error Correction Model) has been employed. The cointegration, long-run relationsip, causal relationship between export and economic growth, and channels export may contribute to economic growth are tesed based on provincial data. The third part is the empirical research on relationship between foreign direct investment and economic growth. Principal Component Regression has been adopted. Due to restrictions on data, this part only takes the industry in Chongqing as the object. The efficiency differences between foreign direct investment and domestic investment, inter and intra spillovers of foreign direct investment are tested.