FDI And Structure Of Foreign Trade: The Empirical Research Of China

The interrelationship between foreign direct investment and foreign trade has increasingly drawn much attention due to the emergence of multinational companies, the increasing share of intra-industrial trade and the deepening of international specialization. The experience of China's economic reform and growth has also witnessed the key role of foreign direct investment in promoting the development of foreign trade in China. What's more, although it's a matter of fact that foreign firms have played a key role in China's foreign trade in recent years, empirical analysis should be made to correctly evaluate the role of foreign firms in China's trade development. Therefore, this essay aims at making a general analysis on the influences of foreign direct investments on China's foreign trade both theoretically and empirically. For theoretical research, this essay mainly attempts to establish a comprehensive framework by generalizing the theoretical history of foreign direct investment and trade research. For empirical research, this essay first utilizes China's time series data during the period of 1986～2005 to investigate the impacts of foreign firms on China's export, import, change of trade patterns as well as the structural influence of trade . Further research has been made on the impacts of foreign direct investment on China's trade structure of development by using 19 China's time series data during the period of 1986～2005. Finally, based on theoretical outcomes and empirical findings, series of policy suggestions have also been made.