Research On The Influence Of FDI To Total Factor Productivity Of Hunan’s Industry

Along with the accelerated pace of global economic integration, the new foreigninvestment is continuously injected into the broader areas and professions. Especiallyin the twenty-first Century, Hunan province has achieved a new leap in utilizingforeign direct investment. The massive introduction of foreign capital, not onlylargely alleviated the fund shortage in Hunan Province, but also had a positive effecton the development of Hunan industry, increasing demand and employment. At thesame time, the new and high technology and management experience which flew intoHunan province followed with the foreign capital also promoted the technicalprogress of relevant departments and the improvement of labor productivity, therebydirectly stimulated the total factor productivity in Hunan province. But consideredwith the need of economic development and compared with the other advancedprovince, there still have some pace. We must adjust the investment strategy andinvestment focus, pay more attention to the guide of foreign investment, to makefurther improvement on the level and quality of utilizing foreign investment.This paper researches on the influence of FDI to total factor productivity ofHunan’s Industry based on the qualitative analysis and the quantitative analysis.Starting with the foreign direct investment theory, this paper presents the effectmechanism and characteristics of industrial development in Hunan Province throughthe analysis of FDI technology spillover effects. Then this paper uses the DEA (DataEnvelopment Analysis) method to calculate Hunan Province industrial productionefficiency index, and then uses the cointegration test and Granger causality test toinspect the data of foreign direct investment in recent years and industry productionefficiency index in Hunan province, which used to analyze whether the stable and causality relationship existed between them. Finally, this paper integrates the resultsof analysis, puts forward the corresponding solutions through analyzing the problemswhich existed in the Hunan foreign direct investment in promoting the Hunanindustrial development briefly, it provides theoretical and practical basis for thegovernment and enterprises to adjust the industrial development pattern rationally andutilize foreign direct investment.