Study Of The Economic Growth Effects Of Capital Flows In Henan Province

After the global financial crisis, the pattern of capital flows has changed dramatically in the context.As China's reform and openness is deepening, the scale of capital flows is also increasing in Henan. Large capital inflows have a great impact on the trade, savings, consumption and expenditure in henan province and promote directly the economic development in our province. Therefore, the paper is to study the effect of capital flows on economic growth in Henan Province.Firstly, This article explains and develops the basic theory that capital flows promote the economic growth. Based on different types of capital flows and the features of capital flows, this article defines the meaning of capital flows.With the analysis Mike Dugard model,the theory of investment in the development stage and loan capital discussed intertemporal consumption model based on the adjustment, this article studies systematically the mechanism that capital flows function economic growth:the role of savings, the impact on investment demand, the effect on capital formation, the role of the financial system and the impact on the real economy.And this article discusses capital factors about the economic effects of capital flows-economic openness, exchange rates and interest rates.Secondly, This article analyzes the status that the effect of economic growth to capital flows in our province. Dased on 1985-2008 panel data and annual time series data in our province, this article tests the use of stationary series, Johansen cointegration test and establishes VAR models and the function of impulse response. From the two aspects of the total amount of capital flows,structure and the sources, this article empirically studies the relationship between capital flows and economic growth in henan. The following conclusions are that:(1)Capital flows have a significant role in promoting economic growth in our province.(2) There is a long-term equilibrium relationship between capital flows and economic growth in Henan. (3) The quality and efficiency of Foreign Direct Investment in Henan runs to be improved.Finally, based on theoretical analysis and the empirical research on our province's economic growth in capital flows, this article proposes measures that promote our province's economic development based on the two aspects of the total capital flows and structure and the factors of capital flows.