A Study On The Effect Of Foreign Direct Investment To The Increase Of Our Country's Economy

With the increase of international capital inflow, especially from 2002,china firstly replace the United States to be the number one foreign direct investment country, the impact of foreign direct investment to china economic growth is the focus from the academic realm to government department at all times. Domestic scholars analyze this problem with multiple index qualitative method and traditional quantitative method elaborately. This paper associated qualitative and quantitative methods. We considered the data stability and tested it when we used traditional quantitative method. And under the recently developed cointegration theory, we analyzed the relationship between variables in the data building process so as to red uce the likelihood of spurious regression which were produced under some economic theory or the cognition of economic behavior in traditional economic model. We discussed the effect of foreign direct investment to industry structure, capital engendering foreign trading and employment of China. And the conclusion was coherent with the fact.The paper included five chapters. The first chapter introduced the research background, status and method. The second chapter summarized the theories of foreign direct investment and economic growth. The third chapter discussed the effect of FDI to our economic growth in qualitative aspect and analyzed the acting of FDI to different aspect of our economy in detail. The forth chapter demonstrated this effect and verified the causality of FDI and our economic growth in Granger Causality method, and if it existed whether it was unilateralism or bidirectional. The last chapter indicated our strategy to utilize FDI combined with the analyzed conclusion.