An Empirical Research On Shanghai's Economic Growth And Openness On The Basis Of Cobb-Douglas Production Function

In the past 50 years, Shanghai's economic growth has made remarkable achievements. Especially since the reform and opening up in 1978, its economy has surged greatly along with the rapid growth of international trade and investment, the GDP maintaining double-digit growth for many years. Behind this high-speed growth, what kind of role is openness playing, whether it constitutes the main driving force behind economic growth, or whether economic growth is a reaction to the openness, different from the past with national data as the main body of research, the paper adopted data of Shanghai to experiment an empirical study.To begin with, this paper reviews the basic theories of economic growth, foreign trade and foreign direct investment, and mentions Shanghai's development since the reform and opening up. On the basis of absorbing our predecessors for the relationship between economic growth and openness, this article abandons Keynesian national income model used in the past, and quotes Cobb-Douglas Function instead, according to the reality of China's national conditions and the availability of statistical data. Through the use of multi-variable co-integration analysis method mainly, the paper grasps the link between Shanghai's GDP, capital, labor and openness by creating the four variables as well as estimating their coefficients. In addition, a three-variable model of GDP, import and export is established to explore in-depth relation between foreign trade and GDP, and also its impact on economic growth.The results of this research have included: the technological progress of developing countries mainly rely on technological spillovers, which is related to the degree of openness; capital accumulation and openness play an insignificant role in promoting Shanghai's economic growth; labor is increasingly becoming a constraint on economic growth; at the same time, it can never be underestimated that economic growth promotes the capital accumulation, expands employment and the degree of openness (including imports and exports) greatly. Such conclusions conflict with the traditional theory, so lastly this paper explain their underlying causes from three aspects including labor, capital and openness.