Relationships between economic growth, foreign direct investment and trade: evidence from China

Abstract

This study investigates the causal links between trade, economic growth and inward foreign direct investment (FDI) in China at the aggregate level. The integration and cointegration properties of quarterly data are analysed. Long-run relationships between growth, exports, imports and FDI are identified in a cointegration framework, in which this paper finds bi-directional causality between economic growth, FDI and exports. Economic development, exports and FDI appear to be mutually reinforcing under the open-door policy.

Research on the Relationship between Sino-EU Trade and Economic Growth

“…Edwards [2] develops a simple endogenous growth model that emphasizes the process of technological absorption in small developing countries, and holds the view that countries that liberalize their international trade and become more open tend to grow faster. Liu and Sinclair [3] find that economic development, exports and FDI appear to be mutually reinforcing under the open-door policy. Makki and Somwaru [4] analyze the role of FDI and trade in promoting economic growth across selected developing countries and the interaction among FDI, trade, and economic growth, their results suggest that FDI, trade, human capital, and domestic investment are important sources of economic growth for developing countries.…”

Outward Foreign Direct Investment and Domestic Investment: Evidence from Industrialized Economies using Panel Data Analysis

“…Some studies (Zhang (2001), Liu et al (2002) and Herzer and Schrooten (2008)) have explored the direction of causality between economic growth and FDI outflows. The question of whether and how the outward foreign direct investment (OFDI) affects domestic output or domestic investment is the subject of public debate in industrialized economies.…”

The Impact of Media in the Socialization Process in Albania

“…This is a region that has been undergoing tremendous economic growth since its inception (Smith, 2011). The gross domestic product (GDP) serves as the most basic measure of a country's economic health (Liu et al, 2002). Further, GDP constitutes the monetary value of the entire finished goods or services produced by a given country in a given period of time (Liu et al, 2002).…”

“…The gross domestic product (GDP) serves as the most basic measure of a country's economic health (Liu et al, 2002). Further, GDP constitutes the monetary value of the entire finished goods or services produced by a given country in a given period of time (Liu et al, 2002). GDP is the total value for consumer spending, government outlays (spending), investments and balance of trade for a country (Makki & Somwap, 2004).…”