The Research Of The Relationsgip Between FDI And Regional Economics Disparity In Jiangsu Province

As a kind of important way in which internationalization and international division deepen further, foreign direct investment becomes one of the most important economic force in the world day by day and has a deeper and deeper impact on international economy and the society. Both of domestic and overseas research found that foreign direct investment can promote economic development, but it m research ay lead to regional economic disparity. Since the reform and opening up, Jiangsu Province has used large numbers of foreign direct investments. And foreign direct investment has played an important role in economic development in Jiangsu Province. But, at present foreign direct investment concentrated in the south of Jiangsu Province and the distribution is very unbalance. At the same time, in Jiangsu Province, there is obvious district difference in regional economy, particularly in the south, the central, and the north region. At present, both of domestic and overseas research on the relationship between foreign direct investment and regional economic disparity mainly based on the whole of China. But in fact, regional economic disparity exist in almost every provinces in the China, especially in some developed provinces where have gained large numbers of foreign direct investments, such as Jiangsu Province . So, this paper study the relationship between foreign direct investment and regional economic disparity in Jiangsu Province . Then we can use foreign direct investment more effectively and achieve regional economy harmonious development of Jiangsu Province.At first, this paper analysed the actualities of direct foreign investment and regional economic disparity in Jiangsu Province. From these analysis, we found that foreign direct investment influenced regional economic disparity in two aspects in Jiangsu Province. One is the unbalanced distribution of direct foreign investment; The other is that the direct foreign investments which gained by each region played different role in each regions' economic development . This two aspects are also the basic aspects of using a economic resource: how distribute it balanced and how use it effectively. Therefore, this paper processed empirical analysis in this two aspects. Then, based on the panel data of Jiangsu Province from 1993 to 2006, we use the Panel Data Model, Co-integration Test and Granger Test to processed empirical analysis. The results showed that both of the two aspects mentioned above influenced regional economic disparity in Jiangsu Province. However, the latter is the most important aspects in which foreign direct investment influenced regional economic disparity in Jiangsu Province. At last, based on the results of empirical test, this paper studied the factor which influenced each area's efficiency of using foreign direct investment areas in Jiangsu Province. We found these factors contained human capital, infrastructure, the degree of economic opening, government's payout of technological innovation.From empirical research, this paper concluded that in order to reduce regional disparities, we not only to let to gain more foreign direct investments, but also to advance central and north regions' efficiency of using foreign direct investment in Jiangsu Province, because the efficiency of using foreign direct investment determines a regions' speed of development. So, the central and north regions of Jiangsu Province should improve infrastructure, attract more person with ability, increase government's payout of technological innovation and make good use of their advantages to attract and use foreign direct investments.