Research On The Dynamic Effects Of Processing Trade And Economic Growth In Jiangsu Province

Processing trade in Jiangsu Province started in the 1980s and developed rapidly since the 1990s, along with the progress of China's reform and opening up. It not only reflectes in the total increasing but also the change of product structure, the principal sector of trade and so on. At present, the processing trade has accounted for half of foreign trade in Jiangsu Province. Now it plays an important part in modern industrial production and circulation system in Jiangsu and profoundly influences the local economy, capital, employment, industrial structure etc.Based on the rapid development of processing trade in Jiangsu Province, this essay combines with theoretical achievements of our predecessors and introduces the idea that the processing trade has a positive link with the economic growth in Jiangsu Province, especially, focused on the dynamic effects to economic growth. Full-text consists of three parts, namely, theoretical analysis, empirical evidence, and applied research. Through theoretical analysis, this essay researches how does the processing trade promote Jiangsu economic growth and establishes the appropriate mechanisms for the promotion. In the empirical part, this essay testes the long-term relationship among various effects,processing trade and Jiangsu economic growth by using the co-integration testing method. Then, establish VAR models and use impulse response functions and variance decomposition method, to make a more complete and painstaking analysis of the lag effect of processing trade. The value of theory is to apply. Through the above analysis, this essay has a basic evaluation of the status of processing trade in Jiangsu Province. Finally, put forward some policy recommendations and hope that they will have a positive guiding significance for the further development of processing trade in Jiangsu Province.