A Study On The Thresthold Effect Of FDI On China's Economic Growth

Foreign direct investment(FDI)plays an important role in promoting trade growth.FDI has become one of the important factors affecting China's economic development.United Nations Conference on Trade and Development(UNCTAD)released the World Investment Report 2015,which shows that China's foreign direct investment(FDI)had surpassed the United States for the first time in 2014 and became the largest foreign capital inflow country in the world.Therefore,it is necessary to deepen the research about the impact of FDI on China's economic in the new situation.Based on the systematic study of the threshold effect of foreign direct investment on Chinese economic growth,this paper begins with the study of the scope of foreign direct investment,the study of foreign direct investment entry mode,the impact of foreign direct investment on economic growth and the study of foreign investment threshold effect.The threshold for the impact of foreign direct investment on the economic impact in the study is still the theme,and only to discuss the various thresholds can we correctly understand the current efficiency of FDI situation.First,the study of the threshold effect scholars focus on is single,but the real world of the threshold may exist between each other;secondly,the research objects,sample and research methods used in different research are different,so the comparability between different conclusions is insufficient,and the future research needs to keep pace with the times.The role of foreign direct investment in capital input countries is reflected in two aspects,one is to increase the domestic capital stock,directly to the development of the economy to provide more material capital.On the other hand,it is through foreign investment in the construction of equipment and the introduction of high level staff.However,the two aspects of foreign direct investment in the data is not so clear expression,so this article tends to directly on the final effect,that is,economic growth to measure.This paper chooses the most commonly used Cobb-Douglas production function and constructs the threshold regression model.This paper analyzes the economic growth effects of foreign direct investment,and further explores the four possible threshold variables,and finds that they have the threshold effect.In conclusion,firstly,the effect of foreign direct investment on economic growth is significant without considering the threshold variable,and the elasticity coefficient is 1.94.Secondly,based on the effect of the overall regression was significant,we validated the four threshold effects.It is found that the human capital with the basic education life has only a single threshold effect,the threshold value is 8.3834.We also found a single threshold effect in the study of the threshold effect of the infrastructure level represented by traffic capacity.The value is relatively high and the number of areas that can be achieved in our country is relatively small;the same threshold has also been obtained after the trade openness analysis,but the threshold is only the most economically developed places in Beijing,Shanghai and Guangdong.The degree of financial development in the study,we got a single threshold effect,and the threshold value was achievable in most areas.