Research On Foreign Direct Investment Effect On Economic Growth Of Guinea

With the globalization of the world economy,foreign direct investment(FDI)has become a fundamental way of international capital flows.FDI effect on economic growth in developing countries is becoming more and more obvious.Guinea as one of the least developed countries in the world,whose economic growth is heavily dependent on international assistance and international investment.Guinea is rich in resources and mineral reserves.With the global economic development,mineral resources' demand is greatly increasing.More and more international capital begin to invest in guinea.FDI has influenced Guinea's social economic in many areas,further affecting Guinea's social and economic life.FDI inflows made up the inadequacy of Guinea domestic investment,increasing the capital stock,promoting the development of Guinea's economic growth.In addition to this,the foreign advanced technology and management experience helped the upgrade of Guinea industrial structure,promoted the improvement of the employment and trade growth.Therefore,it's very essential to study the relationship between FDI and economic growth in Guinea.This article using theoretical and empirical analysis the impact of FDI on economic growth in Guinea.First,outlined the theory of FDI and economic growth.Then,using Eviews7.0 test the relationship between FDI and economic growth empirically.Through unit root stationery test and cointegration test to inspect the time series data,constructed cointegration model of FDI with GDP,labor employment,import and export trade.Using granger causality tests the relationship between FDI and economic growth,concluded that FDI and economic growth could be influence each other.On the basis of the analysis,proposed some suggestions to increase Guinea's attraction of FDI,which could promote Guinea's economic growth.