Study On Contribution Of FDI On Economic Growth In Ethnic Regions

Inner Mongolia as China’s first ethnic minority autonomous areas, accuratelypositioned development strategies which were suitable for the area, since the reform andopening up, especially in the country’s background of the policy to carry out "Development ofthe West Regions"," the revitalization of northeast old industrial base", since2002, itmaintains the first place in the GDP growth for9consecutive years, which has written thenew legend of Chinese western’s economic growth, and known as "the phenomenon ofInner Mongolia" in the development of the west regions". It is absolutely inseparable fromthe foreign direct investment on Inner Mongolia’s economic development. Foreign directinvestment in Inner Mongolia grow out of nothing and from small to large scale, and theinvestment structure that is from low to high, has been rapid development in recent years.In general, this text deeply understands the use of foreign direct investment in InnerMongolia and economic development status, and give the theoretical and empirical analysison the relationship between the foreign direct investment and economic growth in InnerMongolia on the basis of reviewing and analyzing the foreign direct investment andeconomic growth theory, and on this basis some policy suggestion has been put forward, andprovide a certain reference value for later raising policy and economic development to theInner Mongolia.This paper first hackles literatures on the relation between the domestic and foreignscholars on foreign direct investment and the host country or the investment development ofour country economy, reviews a few representative theory about the foreign direct investmentand economic growth, and then deeply analyzed the status from the utilization of foreigndirect investment in Inner Mongolia development stage, foreign direct investment scale,industrial investment, regional investment and investment way in the five aspects of thecurrent Inner Mongolia to use foreign capital situation.Based on above theoretical research and current situation of foreign investment in InnerMongolia, combining with the existing theoretical research, absorbing and drawing a betterempirical analysis method, using empirical analysis, this text discusses the positive effects onthe foreign direct investment to the economic growth of Inner Mongolia. Firstly thecorresponding data has been processed according to the2000-2010the foreign directinvestment and Inner Mongolia GDP data, and the gray connection model has been established by using the processed data, we obtains the gray correlation degree of0.603,which means the correlation is relatively high. Through the coordinating inspection analysis,a long-term equilibrium relationship exists between the internet direct investment andeconomic growth in Inner Mongolia. And when the foreign direct investment increases of1percentage points, economic growth will increase by0.525percentage. The test results ofGrainger causality shows that the foreign direct investment is the cause to promote economicgrowth, but economic growth is not the Grainger reason to explain the increase of foreigndirect investment inflow. Variance decomposition analysis found: when it is stable, foreigndirect investment ’s contribution to economic growth reached about55.71%. Finally, on thebasis of the theoretical analysis and the empirical analysis, some related suggestions abouthow Inner Mongolia better to attract foreign capital and utilize foreign capital, according tothe introducing status of foreign capital,.