A Study On Economic Growth Effect Of Chinese Producer Services Industry By Using Foreign Direct Investment

With the development of globalization and the international industrial transfer, the producer services industry has turned into an important part of FDI, and plays a significant role in a country’s economic development. Producer services industry possesses the feature of knowledge and technology-intensive which has a special affect on economic development. The foreign investment in producer service makes up its funding gap and brings in advanced technology and management experience which effect China’s economy. Therefore, research on the relationship between producer service utilizing FDI and China’s economic development as well as its specific effect on economic growth has a practical significance. It is helpful for us to take relevant measures to promote economic growth.This paper selects statistical data of producer service using FDI amount and China’s per capital GDP from1997to2011, and analyzes the relationship between producer service utilizing FDI and China’s economic growth using theoretical and empirical method. It also analyzes the specific mechanism which affects economic growth and then compares the effects. The producer service’s sub-classification using FDI has a different effect on economic growth, as a result, the paper also uses panel data model to analyze how different industry using FDI affect the GDP growth, and to compare the effects and which provides a reference for guiding fund transfer in the future. The results show that producer service using FDI can promote the economic growth and there is a steady coordinating relationship between them,they are Granger causation relation. The producer service using FDI impact the economic by capital effect, technology effect, employment effect, industrial structure effect, and technology effect is the largest. According to industrial analysis, the financial has the largest effect on GDP by using FDI, but scientific research, technology service and geological prospecting effect are the least. According to the empirical result, this paper proposes corresponding measures as follows----improve China’s producer service using FDI to ahigher level, give full play to its effect on economic growth, and improve its comprehensive strength.