Study On The Influence Of Foreign Direct Investment On Goods Trade In Laos

Foreign direct investment(FDI)is the result of the further development of international capital flows.Most of the foreign investment brings scarce funds for economic construction to the host country(mostly developing countries).Laos has attached great importance to attracting foreign investment in the past decade.Foreign direct investment can not only increase the source of funds in Laos,but also bring advanced production technology,science and technology,management experience and international marketing channels through foreign investment.Based on the above background,this paper adopts the method of literature research,qualitative analysis and quantitative analysis,and studies the influence of foreign direct investment on Lao goods trade according to the relevant theories of foreign direct investment.This study will deeply analyze the impact of FDI on Laos trade in goods and the possibility of maintaining a balance between the development of trade in goods and the growth of foreign investment during the period of Laos’ foreign trade.It will also study the advantages of FDI in promoting the prosperity of Laos trade in goods and the causal relationship between them.Finally,the full text will analyze and draw a conclusion.The conclusion and corresponding suggestions are put forward.The results of this study show that firstly,there is a positive correlation between FDI and trade in goods in Laos,and the trade capacity of goods in Laos increases by 2.18 percentage points for every unit of FDI increase.In a certain range,the faster the growth of FDI,the faster the growth of Laos trade in goods.In terms of investor status,the higher the status of investor in the world,the greater the impact on the growth of trade in goods,and the closer the distance,the more obvious the promotion of trade in goods.Secondly,the empirical analysis of FDI on Laos trade in goods shows that FDI increases the total trade in goods in Laos,which effectively promotes the trade in goods in Laos,while the trade in goods in Laos has no significant impact on FDI.Thirdly,Laos attracts foreign direct investment in terms of growth rate,which fluctuates greatly with the growth rate of trade in goods and the change of international economic environment.Ore mining and petrochemical industry are the key areas of foreign investment.Fourthly,in terms of investment environment,Laos has relatively loose foreign exchange management and service environment.As Laos is undergoing industrial restructuring,this economic situation also provides a good opportunity for foreign capital to invest in Laos.Fifth,in terms of the short-term impact of FDI on Laos trade in goods,the most direct impact of FDI is to increase investment in Laos and promote sustained economic growth;secondly,to effectively promote the growth of Laos’ export trade;finally,to increase the number of employment in Laos and ease the employment pressure of Laos.Sixthly,the problems of introducing foreign capital in Laos include:the difficulty of increasing the scale of introducing foreign capital;the unreasonable structure of introducing foreign capital;the quality of introducing foreign capital needs to be further improved;the potential risks of Laos’s over-reliance on ore economy;and the deterioration of regional security situation,which is not conducive to attracting foreign investment.Finally,according to the above-mentioned problems,we formulate corresponding countermeasures to improve the effect of importing foreign capital in Laos,including further increasing the intensity of attracting investment;optimizing the industrial structure of importing foreign capital;upgrading the scale of importing foreign capital with high-tech content;optimizing the domestic industrial structure;and creating a stable investment environment.