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2007•Dangdai jingji kexueRequires access

Positive Analysis on the Relationship between FDI and Economic Growth in West China

Zhijun Li

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Abstract

This paper uses cointegration and causality theories to test the relationship between FDI and economic growth in West China with data through 1979-2004.The results show that economic growth is the FDI's Granger cause,while FDI is not the cause of economic growth given the lagged difference is 2.We build the ECM based on cointegration analysis and propose policy recommendations.

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What this paper is about

This paper uses cointegration and causality theories to test the relationship between FDI and economic growth in West China with data through 1979-2004.The results show that economic growth is the FDI's Granger cause,while FDI is not the cause of economic growth given the lagged difference is 2.We build the ECM based on cointegration analysis and propose policy recommendations.

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Available abstract

This paper uses cointegration and causality theories to test the relationship between FDI and economic growth in West China with data through 1979-2004.The results show that economic growth is the FDI's Granger cause,while FDI is not the cause of economic growth given the lagged difference is 2.We build the ECM based on cointegration analysis and propose policy recommendations.

Key concepts: Cointegration, Granger causality, Economics, Foreign direct investment, China, Causality (physics), Macroeconomics, International economics

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