Foreign Direct Investment Hunan Services Influence Empirical Research

One remarkable trend is the speedup of economic globalization. Service industry has been an important field for global economic competition. Foreign Direct Investment is an extremely important impetus factor of the economic globalization process. It has proved that Foreign Direct Investment played a more and more significant role in our country's economic development. It is of great significance to study the relations between Foreign Direct Investment and economic growth of local service industry for exploring economic development of regional service industry.Since the 1980s, service industry in Hunan province has obtained some achievements through Foreign Direct Investment .This paper makes research on Foreign Direct Investment and service industry in Hunan province. We summarized relative theories between Foreign Direct Investment and service industry, and then combined with the development process which Hunan has been making use of Foreign Direct Investment, finally concluded the characteristics of service industry by absorbing and using Foreign Direct Investment. We used ADF tests, Cointegration Tests, Granger Causality Tests and Regression Analysis with the tools of metering and tested the relationship between Foreign Direct Investment and economy growth of service industry from different perspectives, such as economic growth, employment, technology and industrial structure. The empirical studies showed that there was a long-term equilibrium relationship between Foreign Direct Investment and service industry's economy. Foreign Direct Investment is Granger reason that causes changes of service industry GDP. Foreign Direct Investment had remarkable influence on employment, technology, GDP of service industry, and contribution respectively is 0.144, 0.356393, 0.439491. Foreign Direct Investment which has played a positive promotion role in service industry GDP is the main variable of service industry's rapid development. In view of empirical result of Foreign Direct Investment and Hunan service industry, we analyzed systematically major effects about Foreign Direct Investment to economy, employment, technology, industrial structure of service industry in Hunan. And taking this as the foundation, we put forward the countermeasure proposal that Hunan service industry makes effective use of foreign direct investment.