Study On The Economic Effect Of The Brics' Foreign Direct Investment

Since the worldwhild financial crisis in2008,the global cross-border investment has declined sharply.The FDI inflow of developed countries has fallen gradually,while the developing countries have become increasingly attractive to foreign investors.In 2013, FDI inflow of the BTICS summed up to ?322 billion, which accounts for 22% of the global total.On behalf of the emerging economies,the BTICS have become the world's most attractive places for global investors. Studies showed that FDI plays a more and more significant role in the host countries' economy,which is indispensable to their furture development.However,it's proved that excessive or unreasonable absorbing of FDI is useless to economic growth.Even worse,it can be negative. So,comparasion study on economic effect of the BTICS'foreign direct investment is of great and practical significance.The theory analysis and empirical researeh of the dissertation are aimed to answer the question:(1)Whether FDI promotes the economic growth in all of the BRICS countries?(2)If the economic effect is different amony the BRICS,what factors have influenced the economic effect?(3)How to make BRICS and other developing countries absorb FDI more effectively?Based on the newly data from 1992-2012,this atrical constructs a VAR model to analyse the economic effect of FDI in each country for the first question;. As to the second question,I relate the empirical findings with the present situation of FDI in the BRICS and explain the difference of economic effect among those countries from three aspects.To answer the last question,the artical gives some policy suggestions for the BRICS,especially for China.The conclusions of this paper are as below:Firstly, the present situations of FDI among the 5 countries are distinctive,industry distribution are all unbalanced, and the FDI policy of India is the most efficient. Secondly,FDI is all positive in promoting the ecomomic of BRICS.The effect from big to small is China, India, Russia, South Africa and Brazil.The difference of economic growth effect is mainly caused by the forms of investment,its industry distribution, the investment condition and related policy:the greater the proportion of green land investment is,the better the industry distribution of FDI matchs the country's industrial structure,the more FDI promotes the economic growth;Perfect infrastructure, broad market, the high-quality human resources and science technology resources,perfect law system, moderately opening policy of FDI, helps to enhance the positive economic effect of FDI. Finally, based on the situation of the BRICS countries,this paper puts forward some feasible policy suggestions: Regulating the cross-border mergers and acquisitions of foreign corporations and enhance the competition of domestic enterprises;Adjust industial policy of FDI and better utilize foreign investments to modify the domestic industrial structure; Improve the domestic investment environment and provide a complete investment system.