An Empirical Analysis Of FDI And Economic Growth In Inner Mongolia

In the last few years, the relationship between foreign direct investment (FDI) and economic growth has been concerned widely. The researches aim at countries in the past, while research object of this paper is some area in our country--Inner Mongolia region. By empirical research, this paper investigates the status and function of FDI in the local economic development, and puts forward the corresponding policy proposals.By ADF-Test, this article reveals both FDI and economic growth of the Inner Mongolia are non-stationary Time Series. Then by Co-Integration test and Granger causality analysis,the paper makes an VAR model estimate of the Inner Mongolian FDI and economical growth series,and finally,portrays dynamic correlations between the Inner Mongolian FDI and the economical growth.Research findings indicate :First,the relationship between FDI and economic growth in Inner Mongolia presents positive correlation. In Inner Mongolian FDI increase can cause economic growth, namely FDI could accelerate economical growth.Second, these two economical variables of the FDI and economy growth is co-integration relationship in Inner Mongolia. Although Inner Mongolia's foreign direct investment and the economical growth has respective long-term undulation rule, because the relationship between them is co-integration, there is long-term stable proportional relationship between them.Third, the impact of FDI on economic growth in Inner Mongolia is remarkable. This article holds FDI and economic growth in Inner Mongolia is positive causal relation from Granger causality analysis. In other words, along with increasing in FDI, the GDP in Inner Mongolia would increase.Fourth, the foreign direct investment can remarkably promote Inner Mongolia's economy and the effect is continuous. The research for the Inner Mongolian foreign direct investment and the economy growth indicates that the former has a positive role in stimulating the latter. The amount of FDI which flowed into Inner Mongolia also is increasing in this stage.