Foreign Direct Investment Affect Economic Growth In Shanghai

To do research on foreign direct investment (FDI) is an important part of international economics and international trade study. As the main pattern of international capital inflows, the effect of FDI on host country's economy has received widely attention. In recent years, the volume of the utilization of foreign capital in China increased year by year. As FDI become more and more important, foreign direct investment has play an important role in various aspects of economics. Especially at the turn of 20th century and 21st century, with a new round of industrial structure adjustment all over the world, the competition is becoming fiercer not only among developing countries, but also inside our country where Beijing, Guangdong, Shanghai, Fujian and other places for instance, give play to their own regional advantages and improve the investment climate one after another to prepare for absorbing foreign capital more. Against this kind of background, for Shanghai, we should not only understand deeply the state of FDI, but also analyze the relationship between economic growth and FDI in Shanghai.What's the more.we should study systematically how FDI influences on the economic growth to give some empirical supports and help to the adjustment of the policy of absorbing foreign capital in the future.This paper combines the theoretical analysis with the empirical studies, using econometrics models and comparative analysis to study the economic effects of importing FDI in shanghai .On the basis of reviewing correlative research, this paper introduces the theory of economic growth, and based on comparing the various economic theories, we derived the mechanism of the effect of FDI on economic growth and construct the theoretical framework of this paper. Then based on the theoretical framework we build econometrics models .through Stat. analysis software EViews.we test effect of FDI on economic growth. The empirical results indicate that FDI in Shanghai has played good role in economic growth,Ex-im trade, advancement of technology and labour augmentation. Finally, some useful suggestions are given to promote the development of Shanghais.