The Study Of FDI Spillover Effects On The Growth Of Economy In China

To study the introduction of foreign direct investment (FDI) is an important domain in Economics. As the main type of international capital movement, the effects of FDI on host country's economy have been collecting wide attention. By the introduction of FDI into most areas of our economy, FDI has enhanced its status greatly, and performed great influence on every sector and link of our economy. Since the beginning of Reform and open-up, we have been obtaining a lot of experience of success, but we are also confronting a lot of barriers.Universally agreed by theorists, FDI imposes positive impact on the host country's economy through its spillover effects, but the effects have not been proved empirically in real world universally. And this means spillover effects are not inherent nature of FDI. Whether FDI could perform spillover effects, how it performs and to what extent have connection with the host county's policies,market condition and the competition capacity of its own enterprises.The paper tries to apply theoretical analysis with the empirical analysis to study FDI spillover effects on our economy. On the basis of reviewing the research done by other economists, the paper introduces its own mechanism of FDI spillover effects and construct theoretical framework, and we build the econometric models basing on it. The paper tries to find the empirical connection between FDI and government R&D investment, between private funds, all-factor productivity and structure of our industries and international trade. The results indicate that FDI increases the government fund in R&D investment, and increases the input of private funds; enhances the rate of productivity in certain degree; streamlines the structure of our industries and international trade. Finally, we brief the flaws of introduction of FDI, and introduce some suggestion might help make reasonable decisions in future.