Empirical Study On The Relationship Between FDI Inflow And Import And Export Trade In Shandong Province

Since China's entry into WTO in 2001,the international trade and foreign direct investment of China's provinces have developed rapidly.Shandong province,as a large economic province in the east coast,has occupied a large share of its foreign trade and FDI in China.For a long time,shandong province is developing rapidly both in import and export trade and foreign direct investment.However,the east-west span of shandong province,the east and the west of the development of the imbalance problem is prominent,so this paper from the east,central and western three areas respectively study the relationship between foreign direct investment and import and export trade.Firstly,this paper deals with the relationship between FDI and international trade from both theoretical and empirical perspectives.In theory,it is mainly divided into the substitution relationship represented by mundell and the complementary relationship represented by kojima.Many empirical studies show that FDI promotes the development of international trade.Secondly,this paper compares and analyzes the status quo of import and export and FDI in eastern,central and western shandong province.In terms of foreign direct investment,the eastern region has the largest inflow of foreign capital,followed by the central region,and the western region has the least.In terms of import and export trade,the eastern region has the most imports and exports,while the western region has the least imports and exports.In terms of the proportion of imports and exports,the eastern region accounted for more than half of the total in shandong province.And for a long time,the proportion of import and export in the eastern region is gradually decreasing,while the proportion of import and export in the central and western regions is gradually increasing.In addition shandong province east and west each region import volume accounted for more than the fluctuation of its export volume.Furthermore,this paper makes an empirical analysis of the relationship between FDI and import and export trade in shandong province.In order to find out the causal relationship between FDI and import and export trade,the unit root test,co-integration test and granger test were conducted on the data from 1998 to2018 respectively,and it was concluded that FDI was the granger reason of import and export trade,while import and export trade was not the granger reason of FDI.Then,theregression analysis is carried out respectively,and the results show that FDI has an obvious promoting effect on the overall import and export of shandong province.For the eastern region,FDI can promote the development of its import and export trade.For the central and western regions,FDI has a positive pulling effect on their export trade,while the import trade results are not significant.Finally,this paper puts forward several Suggestions to improve FDI investment environment,optimize FDI investment industry,promote balanced regional development and improve their competitiveness.