A Study On The Economic Effects Of Liaoning’s Outward Foreign Direct Investment

Since the1980s, the rapid development of world economy, especially the fast advancement of global economic integration, has been strengthening economic cooperation among nations, making Capital flow widespread, diversiform and complex. To compare with Inward Foreign Direct Investment, outward Foreign Direct Investment is an active way to take part in the international labor division and competition on a bigger scale and to a deeper extent.From a global perspective, World economic powers are often the countries which have large amounts of OFDI, which also reflect the economic strength of a nation to some extent; from a national perspective, all the provinces with heavy OFDI are economically powerful provinces.For the capital export country, OFDI has important influence on adjustment of industrial structure, technological advance, job opportunity, international trade, balance of international payment, and so on. Studying the mechanism of action is helpful to strongly promote OFDI development, fully utilize both international and domestic resources and markets, speed up efforts to upgrade its industrial structure, strengthen their international competitiveness.As a coastal opening province, Liaoning has a long history in foreign economic cooperation; its development of OFDI has made an unprecedented progress. With the implementation of revitalizing of Northeast Old Industry Base in2003, Liaoning’s OFDI has played a more and more important role in economic development. But compared with IFDI, it is still too lagging. In this context, the systematic study on effects of foreign direct investment will help us point the way to the next step development.On the basis of comprehensive analysis of the current situation of Liaoning OFDI, this paper uses both theoretical and empirical analysis methods to find the relationship between OFDI and national economy, which is useful to the further OFDI development. The paper is composed of five chapters. In the first chapter, there is a summary about the background and significance of topic selection, the literature overview. The second chapter presents a brief review of the theories about Foreign Direct Investment. The third chapter minutely discusses the macroeconomic effects of OFDI, including balance of payments, adjustment of industrial structure, foreign trade development and employment. The fourth part tests the effects of OFDI on the economic growth and international trade using the methods of Unit Root Test, Co-integration Test and Granger Test of Causality. Finally, I give some suggestions for Liaoning OFDI development from the angle of government and enterprises.