Study Of The Impact On The Economic Growth Of China's Automotive Industry From Foreign Direct Investment Of MNCs'

MNCs have been investing in China on a large scale and in a systematic way since1990s.And therefore,influences of Foreign Direct Investment on China Automotive Industry are becoming more evident day after day.FDI is the result of the global stream of economic integrating.The World's large car companies have all invested China.Foreign investment in China's automotive industry had a share of more than forty percent.No matter in capital,management,or technology aspect,foreign capital has deepened their effects.With the increasing FDI in Chinese car industry,their importance is more obvious.In addition,our government has made automotive industry to be a buttressing industry and made the export of cars to be the main developing direction of automotive industry.Therefore,with these conditions,to analyze the effects of FDI on economic growth of our country's automotive has some practical meanings.In addition,based on the outline of related theories,combines some econometrics modes and common analysis to study the impact of MNCs' Foreign Direct Investment on our automotive industry economic growth.Through the simultaneous equations,the co-integration test and causality test showed that FDI had significant driven role in our automotive industry's output value growth.Moreover,there exists a promoting each other and long term equilibrium relationship between the two.FDI greatly upgrades the industry scale no matter in products or money returns by way of making up the "capital gap" for domestic enterprises;promote the industry's human talent flow.For industry structure,FDI helps to upgrade the whole structure and helps to produce various car products in a reasonable ratio.For example,the ratios among cargo-carrying cars, passenger cars and cars are more and more reasonable;FDI also promote the policy improvement of automotive industry of our country.In addition,this paper uses Malmquist Index and the DEAP software to calculate automotive industry in China on behalf of the technological progress of the key indicators - Total Factor Productivity, then from the technology spillover two major channels:human capital and investment in research and development to make regression analysis on Total Factor Productivity. Furthermore,this paper also does a comprehensive analysis on aspects of export, industrial structure,and institutional change and so on.It was found that the direct investment of MNCs made significant contribution on China's automotive industry economic growth and technological progress.However,in the aspects of export and research development,there are no positive effects.Therefore,in view of some problems in which using the FDI,this paper makes some recommendations based on the result of analysis and the real development situations of our automotive industry Such as encouraging the export of our automotive industry,making efforts to achieve the trade surplus;increasing the R&D investment;supporting the independent innovation;improving the investment environment in order to expand the technology spillover effects.