Empirical Study On Economics Effect Of FDI In Services

Foreign direct investment mostly took place in manufacturing in the early time. In the 1980s, the focus of FDI in the world began to shift to services. With the domestic market in services gradually opening when she entering into WTO, more and more multinational service companies enter into Chinese services market. FDI in services industry has become the most important area of the world FDI field.Manufacture industry has always been the main objective that analyzed by the current cross border FDI theories and effected by the theories on industry structure, however, little research has been conducted on FDI in services. As the continued opening up of international service markets and the further development of trade of services, it is necessary to study the relationship between FDI and service industry development.In the context of international service industry transferring into China and the deepening open of Chinese service industry after China's entering into WTO, based on the analyses of the properties of FDI in services. Focus on the FDI how to impact the development of China's economy and researches the mechanism of FDI in services to the economic growth ,including capital effect, industrial structure effect, technology effect, trade effect, and employment effect. Finally, based on combining qualitative and quantitative analysis of the text of the conclusions, give some useful suggestions about services introducing into FDI.In this part, firstly, use of Cointegration test and Granger causality test method, on the data from 1992 to 2006 made Empirical Study on relationship between China's service industry use of FDI and the growth in GDP. The results showed that: there is long-term correlational dependence between FDI in services and GDP, FDI in services and GDP have a unidirectional Granger causality. FDI in services can promote the economic growth in GDP, but in turn is untenable; Secordly, by the use of trade expansion model of the form of gravitational, further analyzes the way by which the FDI effects growth of the industry of services and find that the employment effect was the most significant growth of path.; Finally, by made study on relationship between China's service industry use of FDI and the growth in GDP. The results showed that: there is long-term correlational dependence between FDI in services and the employment effect, FDI in services and the employment effect have a unidirectional Granger causality. FDI in services can promote the growth in the employment effect, but in turn is untenable.