Impact of Export Trade and FDI on GDP in Henan Province——Based on Analysis on Cointegration Test,Impulse Response Function and Variance Decomposition
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The paper studies empirically the impact of trade and on GDP in Henan Province,by using time series data of exports amout and GDP from 1993 to 2009 and based on JJ cointegration test,impulse response function and variance decomposition.The study results show that: there is a long-term and stable equilibrium relationship and significant causality existing between export trade and GDP as well as FDI and GDP ;the trade and have a strong effect on improving the economic growth of Henan Province,and their impulse response to economic growth is generally positive response,while plays a more important improving role on economic growth than FDI.Finally,the paper gives suggestions about improving export、and to improve economic growth based on study results.Keywords:
Impulse response
Export trade
Johansen test
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Based on the statistics of Tianjin from 1980 to 2007,this paper analyzes the relationships between Tianjin's export trade and FDI by co-integration test and Granger causality test. And this paper uses the generalized impulse response function and variance decomposition to measure the interactive relationship. The results show as follows:there is a co-integration relationship between Tianjin's export trade and the three factors such as FDI,trading partners' GDP and Tianjin's import trade,the major factors determining Tianjin's export are FDI,import trade and trading partners' GDP. This paper also finds that in the short term the response of Tianjin's export to FDI innovation shock is more obvious than to Tianjin's import and its trading partners' GDP; in the long term there is a substitution relationship between FDI and Tianjin's export,Tianjin's export relies more on Tianjin's import,and the impact of Tianjin's trading partners' GDP to Tianjin's export growth is little in the long term.
Impulse response
Vector autoregression
Export trade
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The role of foreign direct investment (FDI) and exports continues to be debated and tested in the literature on international economics and development economies. This paper extends the previous empirical studies on the issue by providing some evidence from time-series data period over 1980-2010 of People’s Republic of China. In this study, the dependent variables were economic growth. The model tested using unit root test, Granger causality, Vector Autoregressive (VAR) and Impulse Response Function (IRF) to analysis that dynamic relationship between economic growth, FDI, export and import. In terms of causality the result shows economic growth will provide a positive influence on the level of FDI, that is, economic growth (GDP) granger causes on Foreign Direct Investment (FDI), and there is a mutual influence between export and import because of intra-trade and imports of intermediate goods. The Vector Autoregressive (VAR) and Impulse Response Function (IRF) approach is to investigate the response of the system to economic shocks; the results showed that, the country’s economic growth is influenced by its lagged values of GDP. Finally this paper draws some policy implications for the further studies to focus on the economic growth in China, to ensure that economic growth would not be drop.
Vector autoregression
Impulse response
Unit root test
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This paper studies the impact of trade liberalization on economic growth for Mexico. A four-variable vector autoregression (VAR) is used to study the relationships between trade, FDI and economic growth using quarterly data from 1989 to 2013. The estimated results from the Granger causality/Block exogeneity test show that economic growth is affected by real non-oil exports, real imports and real foreign direct investment. There is only one bidirectional causality, that between GDP an FDI, and two additional one-way causalities, one between FDI and imports and one between imports and non-oil exports. Thus the system is circular: all variables directly or indirectly affect each other. The Impulse Response Functions and Variance Decomposition show that non-oil exports and FDI have little or no impact on GDP, not supporting the growth-led hypothesis or the one that postulates that FDI promotes growth; nor do we find that GDP has a significant effect on non-oil exports, rejecting the hypothesis that growth induces exports. Finally we find that imports have a significant effect on GDP, supporting the import-compression hypothesis.
Vector autoregression
Endogeneity
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Based on the Chinese economic data from 1983 to 2004, this paper performs an empirical research on the relationship between foreign direct investment(FDI), international trade and economic growth. According to the theory of co-integration and the results of vector error correction model(VECM), it draws a conclusion that there is a long-term equilibrium between the three variables. The results also reveal that there is a bi-directional causality between FDI and GDP. That China is an export-led growth country and the conclusion that FDI can promote international trade can also be concluded.
Causality
Investment
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The problem of the study is to ascertain the significance of trade openness, FDI inflows and the total exports on GDP growth of India.This study examines the short run and long run relationship between growth in concerned macroeconomic variables and economic growth (Real GDP at Factor Cost) by applying Johansen Cointegration Test followed by Vector Error Correction Mechanism (VECM) and Granger-Causality Test.The study incorporates Impulse Response Function (IRF) and Variance Decomposition Analysis to find out the response of GDP to the shock imposed on the concerned explanatory variables.The study covers the period 1975-76 to 2011-12, taking secondary annual data.The Granger-Causality, Impulse Response Analysis and Variance Decomposition results claim that the unidirectional short run relationship exists between exports and GDP.Cointegration tests suggest presence of stable long run relationship among the variables.
Openness to experience
Econometric model
Econometric analysis
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The present study empirically investigates the causality between foreign direct investment (FDI) and economic growth in India over the period 1992-2014, the post economic reforms era. Gross Domestic Product (GDP) has been taken as proxy of economic growth in our study. The study takes into consideration the recent advances in econometric techniques. The study shows the high degree of correlation between GDP and FDI. The variables are tested for stationarity, applying Augmented Dickey-Fuller (ADF) test. The Co-integration test indicates that GDP and FDI are co-integrated time series showing long run equilibrium between the two variables under consideration in India during the study period. To determine the cause and effect relationship between economic growth (GDP) and FDI, Granger Causality test and Vector auto regression (VAR) model have been used. The results suggest that there is bidirectional causality between GDP and FDI. To check the long-run stability the Vector Error Correction Model (VECM) has also been used and the value of the error correction term (ECT) confirms the expected convergence process in the long-run for FDI and economic growth (GDP). The Variance Decomposition also authenticates the cause and effect relationship between GDP and FDI in India. Keywords: FDI, GDP, India, Correlation, Stationarity, Co-integration, Causality, VECM .
Causality
Proxy (statistics)
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The paper studies empirically the impact of trade, on GDP in Henan province, byusing time series data of exports, and GDP from 1993 to 2009 and based on cointegration test, impulse re-sponse function and variance decomposition. The study results show that there is long-term and stable equilib-rium relationship and significant causality between export trade and GDP as well as FDI and GDP .Ex-port trade and have strong effect on improving the eeonomic growth of Henan, and their impulse responseto the economic growth is generally positive response. But plays a more important improving role to theeconomic growth than FDI. Based on the study results, the paper finally gives suggestions about improving ex-port and in order to improve the economic growth.
Impulse response
Vector autoregression
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This paper analyzed the co-integration test,Granger causality test and error correction model to the economic data of Anhui Province from 1991 to 2011.It found that a long-term stable relationship existed among FDI,foreign trade and economic growth.FDI had a positive correlation with economic growth in short-term,but the long-term trend was decreasing,imported caused one-way Granger to economic growth,foreign trade showed the insignificant drive to the economic growth.The error correction model was analyzed that the positive effects of FDI was more obvious than import in the short run and contribution of FDI in the future period increased compared with import. The feasibility of the recommendations were put forward to promote the economic development of Anhui Province.
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The study analysed the effect of foreign direct investment (FDI) on economic growth of Pakistan. Time series data for 35 years from 1979-2013 is utilized in this study. Impact of inflation (CPI) on GDP is also examined. Data of FDI, GDP and inflation is collected from world data bank. Multiple linear regression model is used to find out the impact of FDI and inflation on economic growth of Pakistan. Unit root test is used for stationarity of data. Results of the study show that FDI and inflation significantly affect economic growth of Pakistan. FDI has positive relationship with GDP while inflation has negative relationship with GDP. Keywords: ECONOMIC GROWTH, FDI, GDP, INFLATION
Unit root test
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Being a special island of China,the natural resources and industrial structures of Hainan Province are different from those of the other provinces,thus the relationship between its FDI and its import and export should also be unique.Considering vector auto-regression VAR model is typically used for correlation between time series prediction and random disturbance term impacting on the dynamics of the system variables,based on the data of FDI,exports and imports between 1987to 2011,the paper makes an empirical analysis with methods of cointegration test and error correction model.The results show that:There exists a long-run steady equilibrium relationship between Hainan's exports,imports and FDI;Granger test finds a two-way causal relationship between FDI and exports;Impulse response function and the vector error correction model shows FDI will stimulate exports in shorttime,but increase in exports will decrease FDI.
Vector autoregression
Impulse response
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