FDI Analysis Of Regional Difference Of Economic Growth

Our national economy has kept on increasing by a high speed since reformation and opening. This attributes to the policy "opening to the outside world" to a great extent, especially the entry of the foreign direct investment on a large scale. But we should pay attention: it is realized through an unbalanced increasing way. There is obvious regional difference in our economic growth, particularly in the eastern, the central and the western region. Due to the history and the policy, at present the foreign direct investment that we can make use of is highly concentrated in the east and the distribution is very unbalanced and shows obvious regional difference too. The unbalanced distribution of FDI causes the unbalanced development of our regional economy in a certain extent. And the serious unbalanced development of our regional economy will certainly affect the long-term growth and the positive cycle of our country's economy too. Therefore, in the process of practicing the strategy of western region development, the theoretic and empirical analysis on foreign direct investment and our regional economic growth difference will have important realistic and strategic meanings in leading the orientation of foreign regional investment, and promoting the economic growth in western area, then reducing the disparity between the eastern and the western areas, and achieving coordinated development in the national area.For this fact, we will analyze the reasons of our regional economic difference from the angle of foreign direct investment and take the economic growth theory as the instruction. In the empirical analysis aspect, firstly, we study the influence of foreign direct investment on regional economic growth in China by using marginal product analysis of foreign direct investment and product elastic analysis of foreign direct investment. Then we discuss the influence of FDI on regional economic growth in China and judge if FDI and regional economic growth exist a long-run relationship by using the newest data and cointegration analysis that processes the non-steady time series data and putting FDI and regional economic growth in China into an analytic model. At last, we examine if FDI and our regional economic growth exist with causality and if it is one-way or two-way to exist by using Granger No-Causality testing.On the basis of the above analysis, we come up with some suggestions about making effective use of foreign direct investment in the central and the western region in order to promote the coordinated development of the national regional economy by combining the barriers that the central and the western region exist in attracting foreign direct investment.