Transformation in Foreign Investment Attraction,Quality of FDI and Regional Economic Growth:An Empirical Analysis Based on Panel Data of the Pearl River Delta

After 30 years of reform and opening,China has developed from a capital-lacking country to a relatively capital-abundant country.At present,weak external demand caused by the European debt crisis,domestic overcapacity,industrial upgrading and other contradictions are urgently pressing China to adjust its way of introducing foreign capital and to focus more on the quality of foreign investment instead of merely being obsessed with pursuing the amount.Based on the Relational Model on FDI and economic growth,we introduce another factor--quality of FDI--and conclude that quality of foreign investment is also a crucial factor for economic growth.Using data of nine cities in the Pearl River Delta area from 1999 to 2010,this paper makes an empirical examination over the relationship between quality of foreign investment and economic growth in the Pearl River Delta,attempting to identify foreign investment of appropriate quality better able to promote social and economic development.The results suggest that when introducing foreign capital to the Pearl River Delta area,attention should be paid to four factors including scale of FDI,diversion of FDI to high-tech and modern services industries,the exporting proportion of FDI enterprises and technology potentials carried by FDI.