Study On Regional Difference Of Foreign Investment Influence On Economic Growth In Jiangsu

Since the reform and opening up,Jiangsu province has got remarkable achievements in attracting FDI,which resolved the gap of capital and technology in the process of economic development,thereby promoting rapid economic growth. However, the introduction and absorption of FDI in the southern Jiangsu was much more than in the northern,this pattern also appeared in the regional economic growth. Behind these imbalances, what is the functional mechanism resulting in FDI playing different roles in different regions , how does FDI play in the regional economic growth? These issues are very important for Jiangsu to be a powerful province in FDI.Under the new open situation of Jiangsu economy growth,this paper constructs a framework in which FDI promotes economic growth endogenously after commenting and summarizing the role of FDI playing on economic growth of different theory,namely FDIâ†'economic growth,FDIâ†'capital formationâ†'economic growth,FDIâ†'technological advanceâ†'economic growth,then describes the three routes within the framework in detail.Besides,the writer also elaborates the negative effects FDI palying on economic growth.Based on a framework in which FDI endogenously promotes economic growth, using the Municipal data from1997 to 2007,this study finds out the intrinsic mechanism and evidence between FDI and economic growth in Jiangsu. The empirical test indicates that the effects of FDI on Jiangsu different regions are obviously different.As a form of capital,FDI has significant direct effect in the south,middle of Jiangsu and a larger but not significant marginal effect in the north ,while it plays a limited role in north. FDI significantly brings about technology spillover effect and crowding-in effect in the south,while in the middle,it mainly causes the crowding in effect but not the technology spillover effect,in the west,neither crowding-in nor technology spillover has appeared. Furthermore, we also find that the open market has a remarkable effect on the economic growth among all the factors affecting the economic efficiency in the middle of Jiangsu,it is the enhancement of human capital not the open market that has a greater meaning to attract FDI and improve regional economic efficiency for the northern Jiangsu .Finally,based on the empirical analysis and the present sitiuation of FDI in Jiangsu, several useful policies and suggestions are proposed.