Research On The Trade Effects Of FDI In LaioNing Provicne From Japan

Japan is one of the most important foreign investments and trading partners for LiaoNing Province. Japanese direct invest in LiaoNing Province has become the important feature of Liao-Japan economic relations that rapid development of Liao-Japan bilateral trade. It has invested in LiaoNing Province since the end of 1970s and become one of the main source to attract foreign capital through 30 years. Well, it played a positive role in rapid economic development of LiaoNing Province. At the same time, Japan is also the largest trade partner of LiaoNing Province. The economic relations between Japan and LiaoNing maintain close contact. So research on the intrinsic link between them could establish reasonable policies in LiaoNing Province to promote the development of the two depth.This paper explains the trade of effects of FDI in LiaoNing Province from Japan based on the theories about the correlation between FDI and international trade. First, the article introduces the research background, content and status, etc. Then the second chapter focuses on analyzing the relationship between FDI and trade theories, including the substitution and complementary theories, and summarizes the trade effects of FDI to host trade and FDI direct and indirect effects. The third chapter introduces the overview of development about FDI in LiaoNing from Japan and Liao-Japan trade. It contains the developments and typical characteristics, such as investment motivation, scale, area, trade status and so on. And it analyzes the relationship between the two through the descriptive analysis. On this basis, this paper selects relevant data of FDI in LiaoNing from Japan and Liao-Japan trade from 1993 to 2009. It explains the relation between Japanese FDI in IiaoNing and Liao-Japan by establishing the linear regression model. The empirical results show that FDI in LiaoNing from Japan plays important role in improving the import and export between LiaoNing Province and Japan, they show the positively correlation. In the end, the paper makes the conclusion and puts forward reward relevant policy suggestions to ensure that the scale of investment, improve the quality of investment, and actively guide the investment to primary and tertiary industries.