The Research On FDI’s Impact Of Hefei City

In today’s society, along with economic globalization, the economic between countries are more closely,people pay more attention to foreign direct investment which is the engine of economic growth, however, scholars study areas are mainly concentrated in large national or provincial level and the research from the perspective of the capital city or prefecture-level cities is minimal, therefore, this research paper will analyze concentrated in capital cities.Hefei which is the capital of Anhui Province, in August2011, the State Council give more administrative area. Now it has policy advantages, locational advantages and funding advantages, Hefei not only the fastest growing cities in Anhui Province, but also attracts the most FDI. The goal is to build forward for the modernization of emerging central city of Yangtze River Delta region following the Shanghai-Nanjing-Hangzhou and have a greater influence on the regional mega-cities in China. Along with the the Hefei growing economic, foreign direct investment is becoming increasingly clear that pulling effect on the economy. In this context, the study of FDI and economic development in Hefei, the existence of a causal relationship, the analysis of FDI has a significant role in promoting economic growth of Hefei explore between FDI inflows and import and export trade relationship will Hefei to introduce the formulation of foreign policy and foreign trade policy has played a good theoretical support.Based on the above background and purpose, firstly, explain the status of foreign direct investment in Hefei, and from the perspective of22cities in the Yangtze River Delta, through the comprehensive analysis of FDI performance index and potential index,we noticed Hefei between22cities in the Yangtze River Delta is still"unrealized potential city ".In order to attract more foreign investment, the article further analysis of the advantages in the region attract investment in Hefei, the industrial base, the investment area and investment-oriented.On the basis of the above analysis, through the establishment of the relevant econometric model, then use co-integration test and Granger causality test on the relationship between Hefei Foreign direct investment and regional GDP and import and export,from the empirical analysis results can be seen foreign direct investment make strong pulling power, you can pull the GDP increased by0.78%when the the Hefei use of foreign direct investment for every1%increase in GDP in Hefei; however, import and export the increase on Hefei use of foreign direct investment growth has a strong stimulating effect can make foreign direct investment, when Hefei import and export for each additional1%, FDI can increase of1.3%.Based on the above, in order to improve the size and quality of foreign direct investment, also to play better role of FDI on long-term economic growth in Hefei, the article on the one hand from the strategic level, pro-active in attracting foreign investment should be preferred to introduceand increase the intensity of digestion and absorption, in order to promote their own innovation to optimize the investment structure; the other hand, from the tactical level, continue to facilitate technology transfer from Hefei immediate reality, and increase services and strategic emerging industries to attract foreign capital and strengthen the construction of soft environment, in order to increase Hefei’s foreign investment.