The Correlation Analysis Of FDI Spillover Effect And China's Economic Growth

As an eventful way in the internationalization of production and the further deepening of international division of labor foreign direct investment (FDI) which plays a key role of the accelerator in the process of economic globalization is increasingly becoming one of the most important global economic forces and exerting an influence on the world economy and society profoundly.In addition to increase the capital stock and improve the quality of investment and alleviate the employment pressure in the host countries, especially developing countries FDI has technological spillover effect. Romer (1986), as a representative of endogenous growth theory, in which technology is transformed as an explanatory variable in biochemistry, suggests that technical progress is the main factor to determine the long-term economic growth contrast of capital and labor. If technical progress is endogenous and FDI can lead to technological advances FDI will be long-term impact on economic growth.Based on the idea, this paper first analyses the characteristics of FDI on quantity, type, source structure, regional structure, and industry structure as well as its contribution on China's economy by detailed data and qualitative analysis of a large number of charts. Secondly, an endogenous growth model including FDI is build based on the new theory of economic growth. And then according to the reality of China's Panel data the effect of FDI technology spillover on economic growth is analyzed. Taking into account of the differences on the spillover effect in various regions of China for the different level of economic development, technological development, human capital stock, R&D investment and the infrastructure conditions this paper carries on an empirical analysis from eastern central and western of China separately to discuss the FDI Spillovers on China economic growth. Finally, on the basis of the analysis corresponding measures and suggestions for the future are proposed in order to provide the guidance for the future FDI.