Study On The Contribution Of FDI To The Economic Growth In Zhejiang Province

The geographical location of Zhejiang Province is unique, that is the core area of SouthernYangtze River delta, and this regional advantage has done much for the province in attracting FDI.As a big economic province which start early in Eastern China, the relationship between economicgrowth and FDI of Zhejiang Province is representative and has its own value in research. Based onthat, the author builds the framework of theoretical analysis on the foundation of FDI theory andeconomic growth theory, and then analyzes the correlation of FDI and economic growth whichrefer to the statistical data. What’s more, the author use the way of causality test and co-integrationtest to do the specific validation in the later empirical test work. Which conclude that FDI and theeconomic growth of Zhejiang Province are closely related, there are economic positive correlation,one-way causation and long-run equilibrium relation between them. The conclusion shows directlythat the increasing FDI contributes much to the economic growth of Zhejiang Province.Furthermore, we use panel data model to explore the contribution of foreign direct investmentin10industries and11cities of Zhejiang province on economic growth, and find that foreigndirect investment in manufacturing industry, wholesale and retail trade, information transmission,computer services and software industry, scientific research, technical services and geologicalprospecting, leasing and business services industries will have a significant impact on the economicgrowth of Zhejiang province. From a regional perspective, FDI in Hangzhou, Ningbo, Jiaxing,Huzhou, Shaoxing have contributed more on economic growth, especially Hangzhou, which issignificant, but the capital effect in Taizhou, Jinhua, Quzhou, Lishui is not obvious as a contrast.Based on the result of empirical analysis that from the perspective of inter-provincial,industries and regions, the paper finally put forward the following policy suggestions:focusing on the introduction and utilization of FDI; improving the FDI environment; adjusting thedistribution of industrial and regional; training the international competitiveness of localenterprises.