Research On The Economic Growth Effects Of Inward FDI In Hubei Province Service Industry

Service industry is known as industry and market development " adhesive ",with the rapid development of service industry,Global Foreign direct investment focus turned from manufacturing industry to service industry.The service industry has become the mainstream in FDI structure.With the development of reform and opening up,a large number of foreign capital inflow China,it greatly promotes China's social and economic development,especially since China joined the WTO in 2001,China's service industry has been developing rapidlyas an emerging industry.In recent years,in order to respond the call of country and improve the structure of industry,Hubei Province take actions positively to develop the service industry,attract foreign investment.Until now,Hubei Province had made some achievements.Based on the related economic theory of service industry and foreign direct investment,this paper uses the theory of econometrics to analysis of the relationship between foreign direct investment and economic growth of Hubei province service industry deeply,by using qualitative and quantitative methods,combining with the actual situation in Hubei province and relevant data.In the end according to the research conclusion it puts forward some relevant policy suggestions.In the first part of this article it firstly introduces the background,the purpose and thesignificance of the study,then summarized the related domestic and foreign literatureservice of service industry FDI's effects oneconomic growth,finally introduces the framework of this study and possible innovations and deficiencies.In the second part,it elaborated the present situations and the problems of the inflow of FDI in Hubei province service industry,then it analysis the situation of the inward FDI in Hubei Province service industry in the view of the total scale and the industry distribution.In the third part,it elaborates the related theories and concepts of FDI and economic growth to support the theoretical basis for the empirical analysis.In the fourth part,it studies the effects from two aspects of general industry and specific industry.In general,it selects the relevant data of Hubei Province during 1998-2013,analysis the effects by using the least square method,doing ADF test,Johansen test,Grainger test,Error correction model.The results show that it exsits an significant linear relationship between the inward FDI of service industry of Hubei province and the GDP of Hubei Province service industry.FDI is the Grainger cause of economic growth,has a stimulating effect on economic growth Province service industry.In the concrete industry,it selects estate and finance as the representative industry,establishing the model on Cobb Douglas production function,studies the relationship between FDI and the GDP in the concrete industry.The results show FDI has a positive effect in estate and finance,and the effect in finance is more significant.In the finnal part,based on the conclusions above,the paper proposes corresponding countermeasures and suggestions from four aspects.Firstly,we should develop the service industry actively,optimize the industrial structure,enhance the ability to undertake international service industry transfer;Secondly,the government should strengthen the opening of servicr industry in Hubei Province,forming The pattern of all-round opening up.Thirdly,we should bulid the infrastructure construction,to promote the investment eviroment.Fourthly,we should optimize the structure of the inward FDI in service industry in HuBei Province,vigorously develop the new services.