The Study On The Relationship Between FDI And Economic Growth Of Weihai City

Foreign direct investment (Foreign Direct Investment) is refers to a country’s investors (natural or legal persons) cross-border capital or other factors of production, to acquire or control of enterprise management right corresponding as the core, in order to gain profits or scarce factors of production for the purpose of investment activities. In recent years, with the development of economic globalization, FDI become one of the major force in promoting economic growth. There are important effects and the introduction of FDI to the host country area of employment, import and export trade, technology development, national income. The relationship between FDI and economic growth has become the focus of economic research. Many studies have confirmed the introduction of FDI is beneficial to the economic development of the host country, especially in developing countries. Since China’s reform and opening up, increasing in introducing foreign investment, effectively compensate for the China problem of insufficient investment, is one of the three Chinese promoting economic development.Shandong Province as a coastal province, the introduction of FDI amount has been at the forefront of the country, and Weihai city as one of the coastal city of Shandong Province, is the first to enter the city of Korean, what FDI on Weihai’s economic growth is the effect? So it is necessary to the level of economic development and the introduction of FDI in Weihai city were investigated, analyzed the relationship between is also necessary for economic growth in Weihai, and FDI, systematic research is more necessary to influence the economic development of Weihai city of FDI, in order to Weihai city for the future introduction of FDI policy adjustment to provide some empirical support.Based on the related theory of FDI and economic growth and new economic growth model, using the data of Weihai City, from the source of foreign investment, FDI investment industry, the scale of foreign capital, foreign capital introduction form to analyze the domain characteristics of Weihai City, the introduction of FDI. At the same time, the city of Weihai FDI on the economic growth effect is analyzed in theory. On the basis of theoretical analysis, using empirical research methods effectively, use the stationarity test and co-integration test to study the relationship between FDI and economic growth, the stationarity test and co-integration test shows no long-term stable equilibrium relationship exist between causality, by Grainger test to prove the existence of two short-term Granger causal relationship between FDI and GDP. In the two-way causal relationship, the impact of economic growth on FDI is stronger, and the effect of FDI on economic growth is relatively weak. Finally, on the basis of empirical analysis, summarized in Weihai and how to effectively use foreign capital introduction and puts forward relevant countermeasures and suggestions. Weihai city to speed up economic development, must take the following measures:increase in FDI technology spillover effect; improve the degree of competition in the market, to maximize the promotion of technology transfer and technology spillover of FDI; the full attention of industry distribution and source of foreign direct investment, guide foreign direct investment transfer to technology intensive industry.