The Analysis On The Relationship Between Shandong Agricultural FDI And The International Trade Of Agricultural Products

With the rapid development of world economy and international capitalincreasingly active, FDI (foreign direct investment) has been dominant in theinternational capital investment way. China is also very productive in this process,has been among the developing countries to introduce more of the total FDI, andtrade of agricultural products also occupies an important position in the internationalmarket. As China’s agricultural exports and agricultural province, Shandong’s totalFDI utilization of the agricultural sector reached to$387million, the totalagricultural trade was$36.68billion in2012, the exports is$15.02billion, that isto say, Shandong ranked first in the country during the13consecutive years, and theforeign agricultural enterprises accounted for more than30%of export earnings.Based on the status of FDI and international trade of agricultural products inShandong Province, this paper apply data acquisition and model building, to analyzethe mechanisms of agricultural FDI impact on Shandong Province’s agriculturaltrade in theory. And it applied co-integration empirical analysis, measurement testmethods Granger causality test, error correction model and impulse responsefunction, etc. to discuss long-term and short-term relationship between ShandongAgricultural FDI and export trade of agricultural products. At the same time, it maderelevant suggestions to take full advantage of Shandong Agricultural FDI to improvethe international competitiveness of agricultural products.The research in the mechanism that agricultural FDI effect on Shandongagricultural trade show that the effect of FDI on Shandong agricultural trade ismainly reflected in three aspects, namely the creation of export, import and importsubstitution effects caused, and its total effect depends on the three integratedproduced under the effect. The empirical analysis of the relationship showed that, inthe long term, there was long-term stable equilibrium relationship betweenagricultural FDI and export trade of agricultural products in Shandong. In the shortterm, Shandong Agricultural FDI can promote the export of agricultural products,while the effect on imports is less obvious.Based on the above analysis, we know that Shandong Agricultural FDI canpromote the export of agricultural products. To this end, the status quo for theseanalyzes and conclusions, we propose to adjust the structure of foreign investment, improve the investment environment and the market mechanism and so on, furtherto improve the utilization of agricultural FDI and the international competitivenessof agricultural products in Shandong Province.The main innovation of this article may be reflected in the research perspective,a lot of the existing literature on FDI mostly are on the national level and the secondand third industry level, but only a handful of them focus on the region andagricultural level as a starting point. Therefore, this paper will undoubtedly expandthe study of theoretical research perspective FDI and will also enrich the contents ofFDI. But given that I have limited research level, the research on the relationshipbetween the two theories is not enough in-depth, pending subsequent enrichment.