Foreign Direct Investment of Service Industry and Economic Growth——China's Empirical Research

This paper constructs a dynamic model of China's service FDI,service industry value and GDP as a system of reciprocal determination and interdependence of endogenous variables in order to analyze the interrelated variables of the interactive relationship between the intrinsic mechanism and effects.Based on the data from 1983 to 2000,the main contents include establishing a vector autoregressive model and corresponding cointegration test,whether there exists a long-term relationship between FDI in service industry and the economic growth in China.The author finally puts forward some policy suggestions.The results of empirical study show that there exists a cointegration equation among FDI in service sector,service industry value and GDP at the 5% significant level.Moreover,service industry added value and GDP maintain bidirectional Granger causality.This paper also finds that FDI in service industry was the cause of the growth of GDP in Granger causes,but GDP growth was not the cause of FDI in services industry.