Foreign Direct Investment Effects Of The Economic Growth Of Liaoning Province

With the deepening of international labor division and fast development of economic globalization, opening up to the outside world is more and more important for a country's economy and FDI is playing a more and more important role in its extrovert economy. Always industrial base vigorously must go to all-sided open new way, Introduction and utilization of FDI has an important meaning for pushing forward the economic development and revival of Liaoning old industrial bases. Therefore, under the circumstances of economic globalization and investment liberalization, studying the relationship between FDI and the economic growth of Liaoning Province with the policy of old industrial base development, so as to empty out again in Liaoning old industrial base will have an important theory and practice significance.This paper combines the theoretical analysis with the empirical studies, history with logic to study the economic effects of importing FDI. On the basis of reviewing correlative research, this paper introduces the theory of economic growth on Amphitryon' FDI and compared the various economic theories, we construct the theoretical framework of this paper. Then, it hits high spots on development phases and basal state of Liaoning's FDI, and analyses increasing GDP, capital accumulating effect and the spillover effect of FDI on economic development. Basing on analysis of FDI structure features, and combining with existing research results, the thesis absorbs and applies effective positivist research methods. The conclusions are as follows:(1) Using the method of cointegration and Error Correction Model (ECM) to have the data analysis, test FDI and GDP have formed a stable long-term balance, FDI inflows on GDP growth, and exists two-sides Granger causality.(2)Basing on econometric model of FDI on domestic investment from Manuel and Ricardo, the results indicate that in Liaoing there has been strong crowding in domestic investment by FDI, therefore, we should continue to allure FDI to increase capital.(3)Via traditional Cobb—Douglas production function to assess technology progress effects of importing FDI, The empirical results indicate that FDI of Liaoning has played the positive spillovers effect to technology progress, but the effect is not as good as we expect.Finally, based above analysis, some useful suggestions are given to absorbing foreign capital and promoting the development of the Liaoning Province.