An Empirical Study Of The Impact Of FDI In Shandong Province On Economic Growth And Employment

As a coastal open city,Shandong province has been active in introducing foreign investment.The number of FDI also shows a tendency of increase year by year.Therefore,to study the effect of FDI on the economic situation of Shandong province becomes a very important subject. For a country, the four indicators of macroeconomic regulation and control are GDP, employment rate, the rate of inflation and the balance of payments, and for a province, the most important and most notable macroeconomic indicators are the GDP and employment rate undoubtedly. Therefore, the research of studying the effect of FDI on economy of Shandong province from the two aspects of economic growth and employment is more comprehensive than the unilateral research. It can help us grasp the pros and cons of the impact of FDI on the economy of Shandong province comprehensively. Taken both economic growth and employment in to consideration,we can put forward more rational proposal on the introduction of FDI.In this paper, I have taken the annual data from 1984 to 1984.I have taken stationarity test and cointegration analysis using the three groups of time series data of FDI, the output value of secondary and tertiary industries and the employment of secondary and tertiary industry of Shandong province,and I have established the error correction model for impulse response and variance decomposition analysis. The results showed that in both short term and long term, FDI has a promoting effect on the economic growth of the secondary and tertiary industries of Shandong province,and FDI also has a promoting effect on the employment of the secondary and tertiary industries of Shandong province.however,in the long term, FDI has a inhibitory effect on the employment of the secondary and tertiary industries of Shandong province.Based on the above conclusions, it is suggested that we should continue to encourage the introduction of FDI.At the same time, we should raise the investment promotion and capital introduction standard and pay attention to the quality and effectiveness of the introduction of FDI.we should encourage domestic enterprises to research independently and develop new technologies and enhance the competitiveness of domestic enterprises market.then we can reduce the extrusion of foreign investment in domestic and reduce domestic monopoly and market on foreign enterprise internal enterprises. It is suggested to make reasonable policy to guide the introduction of technology, to combine the introduction of the project with the imported technology. For the city whose employmentpressure is low and labor force is insufficient, we should encourage the introduction of high-tech projects.For the city whose employment pressure is high and labor force is sufficient, we should encourage the introduction of labor-intensive projects to promote the healthy development of foreign direct investment of Shandong province.