The Effects Of FDI On China’s Economic Growth Efficiency

Since the reform and opening-up, the scale of FDI grows rapidly along with China’s economy. A great number of research shows that, FDI contributes a lot not only in China’s economic growth, but also in the efficiency of China’s economic growth. However, due to the immature structure in the introduction of FDI, the proportion of FDI in high energy consumption and heavy pollution industries grows day by day. These kinds of FDI would intensify the pollution and energy lacking problems.As resource and environmental problems become increasingly significant, such as global climate changing and oil crisis, pollution control and the efficiency in resources utilizing has became an important part in the measuring of efficiency of economic growth. Therefore, taking the influence to resource and environment into consideration while calculating the efficiency of economic growth, and reinvestigating the influence of FDI towards China’s economic growth efficiency is significant. Around the subject above, the article contains three parts.The first part contains chapter1and2. Chapter1is the introduction part, briefly talking about the background, significance, contents and possible innovations of this research. Chapter2focused on the research of calculating economic growth efficiency and the relationship between FDI and economic growth efficiency worldwide while summarizing the theoretical and empirical research.The second part contains chapter3and4, which is the core part of the research. In chapter3, we calculate the efficiency of China’s industrial economic growth. Based on the existing research, we use Malmquist-Luenberger productivity index as a measure of the efficiency of economic growth with environmental constraints. Emissions of solid waste, industrial waste, SO2and CO2were modeled into this indicator as unexpected outputs. We also estimate the ML indexes of33industrial sectors of China from1994to2011, and decompose them into technological progress and technical efficiency. Estimation results show that most of the traditional TFP indexes are much higher than ML indexes. And the main channel of the improvement of growth efficiency with environmental constraints is technological progress, instead of improvement of technical efficiency. In chapter4, we constructed a regression model with ML productivity index and its decomposed indexes as the dependent variables and FDI as main explanatory variables, the regression model is based on the panel data of33industrial sectors of China from2000to2011. Using the model, we further discussed the influences of FDI to the efficiency of China’s economic growth.The third part is the conclusion part, which contains chapter5. This part summarizes the empirical research above, and according to the main conclusion, we list several related policy suggestions.