The Co-integration Research of the Relationship Between FDI and Capital-forming of China
Chu Ming-da
Abstract
Chu Ming-da
Abstract
This paper sums up the analyses in the economic circles about the general relationship between foreign direct investment and capital-forming at first, then use the cointegration theory to test the data's stationarity and Granger causality, sets up the cointegration model and error correction model of FDI and the investment in fixed assets of the whole society, concludes that FDI has promoted the capital-forming of our country in both a long term and a short term.
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This paper sums up the analyses in the economic circles about the general relationship between foreign direct investment and capital-forming at first, then use the cointegration theory to test the data's stationarity and Granger causality, sets up the cointegration model and error correction model of FDI and the investment in fixed assets of the whole society, concludes that FDI has promoted the capital-forming of our country in both a long term and a short term.
Key concepts: Cointegration, Foreign direct investment, Economics, Error correction model, Granger causality, China, Term (time), Causality (physics)