A Study On The Relationships Among FDI, Foreign Trade And Economic Growth

Since the implementation of reform and opening up policy, China has been vigorously developing outward-looking economy, and the national economy growing rapidly; the inflow of FDI and the expansion of foreign trade have exerted a great influence on regional economic growth. Studying the relationships among FDI, foreign trade and economic growth in Anhui province will help to realize positive interaction between opening to the outside world and economic growth under the new situation, which is both theoretically and practically meaningful.Based on related economic theories, by combining qualitative analysis with quantitative analysis, theoretical analysis with empirical analysis, this paper uses the econometric methods of cointegration test and Granger causality test to make a systematic study on the relationships among FDI, foreign trade and economic growth in Anhui. Then, it draws the conclusion that there are long-term dynamic equilibrium relationships among them, FDI Granger causes economic growth, while economic growth does not Granger cause FDI, there are not Granger causality between net export and economic growth. The level of opening up of Anhui needs to be further raised.The paper is made up of six parts: Chapter 1 is introduction. Chapter 2 is literature review, first it introduces theories concerning the impact FDI and foreign trade may bring to economy, and the views of the role they play in the theory of economic growth; then it summarizes the empirical studies at home and abroad on the relationships among FDI, foreign trade and economic growth. Chapter 3 describes the present condition of FDI and foreign trade in Anhui economic operation. Considering their position and role in economic operation, it analyzes from different aspects. Chapter 4 discusses the mechanism by which FDI and foreign trade promote economic growth, expounds the positive effects FDI and foreign trade may bring to economic growth in theory. Chapter 5 is the empirical analysis of the relationships among FDI, foreign trade and economic growth, using the methods of cointegration test and Granger causality test. Chapter 6 is conclusion and suggestions, first it comes to the basic conclusion, and analyzes the causes, then it brings forward some advices on promoting economic growth by developing outward-looking economy in Anhui.