Empirical Research On FDI And Economical Growth Effect Of Six Provinces In Central China

In recent years, the acceleration of international capital flows on national economies has had a far-reaching effects. And foreign direct investment (FDI) as the main form of international capital flows, play an important role in China's economy. Foreign direct investment have both demand-pull effect, such as accelerated capital formation, stimulating employment, exports in the region, etc.,and the supply effects in long-term, including the introduction of foreign advanced technology, management experience and the latest information. Based on this, the dissertation focus on the central six provinces to study on the relationship between FDI and economic growth are more significant.First of all, using the central six provinces'panel data, to study on economic growth means from two different perspectives: capital formation effect and technological advancement effect. From the perspective of the capital formation effect analysis shows that it's complementary relationship between foreign direct investment and the central six provinces, crowding-out effect does not exist. Therefore, the host country on FDI to increase capital levels and capital accumulation, thus increasing production in the host country, FDI promote the six provinces of central economic growth. The analysis of technological advancement effect shows that the combined effect resulting from total factor productivity and economic growth is positive , but less than the economic growth brought about by the effect of its capital stock and labor. The combination of Human capital and FDI to promote the total factor productivity and economic growth.Then, using the FDI and GDP time-series data of the central region and the six provinces, to go for further proof of the correlation between FDI and GDP, the measurement results through the central region and the provinces of the output elasticity of FDI differences. The results show the equilibrium stability relationship between FDI and GDP of the central region and the provinces in long-term. Foreign direct investment to promote economic development in the central region, but six provinces of FDI on economic growth are in individual institutions.Therefore the policy meaning of this article lies as follows: If the central region need to keep its sustainable development of economy and society, they should actively absorb the successful experience of the eastern region during the process of bringing in FDI. We should improve the investment environment, the key is the infrastructure and policy environment. Efforts to enhance the our own ability to innovate, the key is to establish mechanisms for the flow of talent, increase the training and R&D investment to improve the introduction, digestion and absorption capacity. In the structure of the use of foreign capital, it is necessary to intensify efforts to introduce cross-border capital, the key is to change only the number of light of the extensive quality of economic growth and investment patterns, and the capacity of technology transfer.