Empirical Study On The Relationship Between FDI And Economic Growth Of Guangdong Province

Utilizing Foreign Direct Investment (FDI) to promote economic growth is an important strategy for Guangdong Province. To have a research on the impact of FDI on Guangdong's economic growth for the past twenty years, and the relationship between FDI and economic growth of Guangdong Province. this paper is going to use the quantitatively and qualitatively means to make the systemic study on the basis of theoretical analysis, considering the development course of FDI in Guangdong Province and the present situation.In this paper, many dimensions of FDI into Guangdong Province and its latest changes, including amount, scale, means, original countries, distribution among different industries and regions are analyzed. The effects of FDI on Guangdong Province's fixed assets formation, foreign trade and employment are also explored.This paper applies Co-integration and Granger causality test analytical tools to investigate the relationship between FDI and economic growth of Guangdong Province based on the data over the period of 1979-2004. The results of empirical study show that there is a long-run, stable, equilibrium relationship between FDI and economic growth. And in short term there is no Causality between FDI and economic growth, but FDI is the cause of growth in China, the economic growth is also the cause of FDI inflow to China in the long-run. From the empirical study on the FDI from different district, we know that the FDI coming from West Countries do well in promoting the economic growth than the FDI from Hongkong, Macao and Taiwan.