Positive Research on the Relationship between FDI and Development of China's Service Industry
Fen Dai
Abstract
Fen Dai
Abstract
Service industry is becoming the engine of China's economic growth, as well as the attractive field for the inward Foreign Direct Investment(FDI). Based on the data of nearly 20 years, the author establishes the Vector Auto-regression Model and Granger Causality Analysis Model in this paper to test the cointegration and granger causality between FDI and the growth of China's service industry. The study shows that FDI is one of the factors that propel the development of China's service industry. In this paper, the author also analyzes the change of FDI on the selecting of concrete services and tries to study the influences of FDI on the structure of service industry.
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Service industry is becoming the engine of China's economic growth, as well as the attractive field for the inward Foreign Direct Investment(FDI). Based on the data of nearly 20 years, the author establishes the Vector Auto-regression Model and Granger Causality Analysis Model in this paper to test the cointegration and granger causality between FDI and the growth of China's service industry. The study shows that FDI is one of the factors that propel the development of China's service industry. In this paper, the author also analyzes the change of FDI on the selecting of concrete services and tries to study the influences of FDI on the structure of service industry.
Key concepts: Foreign direct investment, Granger causality, Cointegration, China, Tertiary sector of the economy, Service (business), Economics, International economics