The Empirical Study On The Impact Of Foreign Direct Investment To Economic In Shanxi Province

Foreign direct investment (FDI) as the product of one of China’s reform andopening up has made a significant contribution for the last three decades of economicdevelopment in China. In theory, FDI not only has to make up for insufficient funds,and FDI from developed countries plays an important role in technology transfer,enhancing human capital, promoting institutional change, improving managementskills and other aspects. With the overall expansion of FDI in China, Shanxi Provincein the central region has gradually attracted the entry of FDI with its traditional heavyadvantage. The role of FDI in the economy of Shanxi determines Shanxi’s foreignpolicy in the future.This paper analyzes the impact of FDI to GDP growth, three industrial structure,foreign trade, the regional capital formation, technology spillovers and employmentempirically according to the FDI status in Shanxi Province, and then based on theempirical results makes clear Shanxi’s attitude to FDI and proposes the correspondingstrategies.Firstly, this paper describes the FDI status from the scale, the form, origin,industry distribution and the use of foreign areas of FDI in Shanxi Province, andanalyzes the main factors of attracting FDI in Shanxi Province by gray relationalmodel; Second, proves that FDI has a positive impact on the economy from GDPgrowth, three industrial structure, foreign trade, capital formation, technologicalspillovers and jobs of Shanxi province by empirical study; Finally, based on FDI’spositive effects to the economics of Shanxi Province and the actual situation, thispaper proposes countermeasures,such as improving the investment environment,expanding financing channels and guiding FDI distribution in Shanxi Province,toachieve the further introduction and the effective use of FDI, so that FDI helps theeconomy development from the capital, technology, personnel and management inShanxi Province.