FDI Spill Over Effect On Regional Economic Growth

China’s actual use of foreign investment ranks first among America EU Russia and Brazil for a consecutive 23 years,actual use of foreign capital is 119.56 billion US dollars, increased by an annualized 1.7%.FDI makes great contributions to our economy and social development,especially tax and employment,take the joint annual inspection data as an example in 2012,from ministry of commerce,import and export of foreign investment enterprise is 1.8602 trillion yuan,produce industrial output value22 trillion yuan,Absorb the direct employment population 45 million,respectively the51.1%、26.1%、14%、20.5% of the total amount, It is less than 3% of total Chinese companies,large amounts of money,not only penetrate into China’s major areas,but also occupy the dominant position.The government adjust economic policies to attract foreign investment enterprises to improve their production efficiency,mainly focus on the high technology level and spillover effect of knowledge,it also can improve domestic productivity levels,decide the total factor productivity growth,promote technological progress and economic growth,it is the engine and impetus of technology improvement and economic growth,thus,more and more countries take attractions of foreign investment as their foreign policy.In this paper, on the basis of predecessors’ research results,With reference to relevant theory,first of all,set up a three-sector endogenous growth model,then to measure the balance result of FDI spill over effect,based on the market development degree.And then construct an empirical model,discuss the FDI spillover effect in various regions and different market development degree,Through qualitative and quantitative methods,on the basis of qualitative analysis,Using the panel cointegration,Granger causality test and impulse response function of measurement method to dynamically grasp the key problem,With the increasing inflows of FDI in China and the expansion into industry,how to make good use of FDI and technology spillover of FDI are main concerns of policy makers.