The Relationship Between FDI (Foreign Direct Investment) And Trade

Foreign Direct Investment (FDI) and International Trade are the two basic forms of International economic activities,they are also the two most important international economic relationship.For a long time,the debates on the real relationship of them have been being the hot topic of International Economics circles.This thesis will analyze the relationship between the inward FDI and the external trade of the nation(area) receiving the FDI principally.Concretely,the thesis takes a province of China (Zhejiang Province) for example. Thesis uses trustiness data from 1984 to 2004 ,then gets correlative time series.On the base of strict Stationarity Test and Cointegration Test and Granger Causality Test,thesis analyses the relationship between the FDI and the external trade of Zhejiang province using regressive way.The thesis is composed of six chapter.The first chapter is the preface of the thesis.The second chapter summarizes the already representative discussions on the topic in and out.In the third chapter,thesis reviews the history of Zhejiang province's receiving FDI and developing external trade.In the fourth chapter, thesis analyses the relationship between FDI and Trade using the Eviews econometric software,on the base of strict Stationarity test and Cointegration relationship test.During the fifth chapter,the relationship between FDI and Trade is analyzed from a more microcosmic point of view,from the angle of different original countries of FDI invested into Zhejiang.The sixth chapter is the part of thesis'conclusion and policy suggestion.With the analysis of the thesis,we can get following main conclusion:from a long time angle,the FDI and the external Trade of Zhejiang province have a relationship partial to mutualism.Meanwhile,the elasticity of Trade towards FDI has some positive correlation to the size of FDI.