Relations Of Foreign Direct Investment And Economic Growth In Jiangsu Province

In the world, all the countries and regions are interdependent and influencing each other, which have already made the world to be an inalienable organic whole. Under such a background, opening to outside world and foreign direct investment are extremely important to developing countries. They are becoming a strong engine of economic development in these regionsFDI is being more and more effective and has made great achievements in Jiangsu province since 1990s. Foreign direct investment not only increases the supply of capital stock, but also introduces advanced technologies and promote the development of foreign trade business of Jiangsu province .Therefore, whether we can elaborate the problems by empirical analysis, such as to what extent does FDI influence GDP of Jiangsu province? Is there causality between FDI and Jiangsu province's economic growth? The answers will produce roles on Jiangsu province's foreign capital policy, and sum up the experiences of utilizing foreign investment in the past years as well.Firstly, this paper reviews the relative references home and abroad, then by building optimal intertemporal model deduces an Euler equation of harmonious economic growth under the frame of endogenous growth theory. On this basis, this paper analyzes how FDI pulls the economic efficiency of the host country .The result is that FDI first influents the stock and using efficiency of the host country's factors through labor employment effect, the "crowding in" and "crowding out" effect of FDI on domestic investment and technology spillover effect, and then influents the economic growth of the host country.Secondly, this paper combines quality analysis and quantity analysis together. The quality analysis enhances persuasiveness by using numerous statistic data to avoid subjective judgment. In this paper, we analyze the effects of FDI to the economic growth of Jiangsu province, the industry structure and foreign trade development on the basis of the characteristics of FDI. The quantity analysis of this paper uses the OLS, Granger causality test, stationary inspection, autocorrelation inspection and multicollinearity inspection. In this progress, we consider the stationary of the data, and have carried on the stationary inspection.Finally, this paper brings forward relative policies of and suggestion on our using FDI on the basis of the above theoretical analysis and empirical test.