An Empirical Study On The Effect Of FDI On The Economic Growth In Western China

Since the 1990s foreign direct investment (FDI) has been the main pattern of international capital China utiliting and the influence of FDI on the economic development on host country's economy has received widely attention. And many researches have been carried out to study the effect and the various influences that FDI might have on the economic growth of China, while researches remain rather weak in the study on the influence that FDI has on the economic growth of western China as well as the reasons for its effect in the western regions. Therefore, under the circumstances of economic globalization and investment liberalization, studing the relationship between FDI and the economic growth of Western China with the West development,so as to reduce the gap between Western China and Eastern China will have an important theory and practice significance.This paper combines the theoretical analysis with the empirical studies, history with logic to study the economic effects of importing FDI. On the basis of comparing the various economic theories and reviewing correlative research, we construct the theoretical framework of this paper. Then based on the theoretical framework we build econometrics models, through Stat. analysis SPSS12.0, using the method of OLS to have the data analysis, testing the industy structur effect, labor input effect and the crowed-in and crowed-out effect of FDI on economic growth. Researches show that the growth of GDP in the west region is mainly drawn by investment, the FDI has effects on the growth of GDP of the western region by it's short-term demand in particular, but its contribution was insignificant. The growth of GDP in the west region is attributed to the West development and domestic investment .The futher analysis finds that under the condition of the developmeng that agriculture, architecture and service was far delayed the industry ,theirs absorbing capacity is behind industry and is relativiy shrivel.Based above analysis, some useful suggestions is given to promoting the development of the Western China.