Empirical Analysis Of The Relationship Between Foreign Direct Investment And Economic Growth Of Jiangsu

Since the reform and opening policy issued, Jiangsu province has actively followed the national strategy of all-sidedness, multilayer and broad fields by largely expanding the introduction of foreign capitals and guiding the directions of their investment. As a result of it, the pace of foreign capitals' utilization has been evidently quickened and Jiangsu provincial economy has been developing along a track of sustained speedy and steady manners. This text deeply understand the level of economic development and the state of FDI in Jiangsu, analyze the relationship between economic growth and FDI, and help to the adjustment of the policy of absorbing foreign capital in the future.This thesis defines the concept of FDI. After studying the interrelated literatures, the author analyses present situation and structure feature of absorbing foreign capital in aspects of foreign capitals' scale, form, origin sector, region, investment allocation by industry, by using time sequential data from statistical data (1985—2005) of Jiangsu Province, which based on the basic theory of FDI and economic growth.Basing on analysis of FDI structure features, and combining with existing research results, the thesis absorbs an applies effective positivist research methods and discusses the extensive influence on Jiangsu economic increase of FDI, by using analysis result and metric searches. First, through the study of the imported foreign capital of Jiangsu province since 1985, there is a long-term stable relationship between FDI and economic growth according to the co-integration analysis, and it is found that Granger Causality exists through Granger-Causality test. It is concluded that the per FDI makes greater contributions than per domestic capital to economic growth through construction of the model of C-D production. Secondly, by using linear regression, statistical analysis was done on the time series data of some indicators of economic growth in Jiangsu, such as whole social fixed assets investment, industry total production value and external trade development, to get real economic result of FDI in Jiangsu.At last, summarizing and some suggestions on how to utilizing foreign capital are given on the basis of the analysis result.