Empirical Research On The Effect Of FDI On The Export Trade Structure In Jiangsu Province

As a model of export-oriented economy in the east China area, Jiangsu province's FDI(foreign direct investment) and export trade play an irreplaceable and important role in the process of its rapid economic development. Foreign capital inflows can bring endless opportunities to an area, it can not only drive the rapid development of export trade, make up the capital shortfall, but also permit the reallocation of productive factors, and rapid economic growth. However, the host country will also face an unpredictable challenge : the instability of foreign investment will bring a virtual growth of export trade volume and unbalanced trade structure. Therefore, from the point of long-term development, studying the export trade structure upgrading is more meaningful than research on the total trade volume increasing. In addition, the role of capital and technology intensive products and labor-intensive products plays on optimizing the trade structure is very different, the degree that FDI influence the both kind of goods is also different, which will lead an orientation with transition in the export trade structure of Jiangsu Province in the future on a certain level. Thus an empirical research on how FDI impact export trade commodity structure in Jiangsu province has a long-term and realistic significance.Based on the theoretical research of direct investment and international trade, We firstly use the time series data of Jiangsu province in 2003-2012 from the statistical yearbook, to make a qualitative analysis of the present situation of the utilization of foreign capital from FDI's basic facts, way, industry and source distribution. Again from of the four angles on the then we analyse the structure of export trade in Jiangsu province from four angles: the export trade's basic facts, commodity structure, mode structure and regional distribution. Based on these deep insight, with the export commodity structure as the center, we use quantitative analysis method to do empirical analysis on the data we obtained, including the unit root test, co-integration test and error correction model. In order to analyse the effect that FDI put on the export trade structure objectively and concretely. In addition to make the manufactured goods and the ratio of the primary products exports as the variable of export commodity structure, we also add capital and technology intensive and labor intensive manufactured goods exports of manufactured products internal structure as two variables in this paper. Which can not only test the influence more comprehensively and specifically, but also can provide background support and theoretical basis to upgrade the export trade structure and make a deep investment plan. The results showed that from a long-term perspective, FDI has a promoting effect on optimization of export trade structure, and a transition in Jiangsu province's industrial structure from labor intensive manufactured exports mainly to intensive capital and technology mainly. In the short-term point of view, the change of Jiangsu province's export trade structure and the manufactured goods' exports value is affected by the change of previous FDI, meanwhile there is correction mechanism which is deviated from the long-term equilibrium. Finally, based on the present situation and the results of empirical analysis, we put forward the policy suggestions of further use of FDI to optimize the export trade structure in Jiangsu province.