FDI Inflows, Foreign Trade and Conversion of Government Functions

DOI

10.2991/mehss-18.2018.34How to use a DOI?

Keywords

FDI; Trade; Government Final Consumption ;VEC model; Granger causality

Abstract

This paper empirically analyze relation of FDI inflows, foreign trade and government final consumption, using Johansen cointegration test, VEC model and Granger causality model by using the Chinese data from 1980 to 2016 . The results shows that there is an equilibrium relationship that is negative effects in the short term and positive effects the in the long term between direct investment inflows and government final consumption, that is, FDI will prompt the conversion of government functions to the market in the short term, but it will not be conducive to the marketization of government functions in the long term; There is a long-term complementary relationship, which is a short-term substitute between FDI and trade. In economic development, there is a conflict between short-term goals and long-term goals, between the government and the market. Therefore, this paper point out ,in the transformation and upgrading of China's economy, institutional reforms are needed, and making the government playing a key role in the allocation of economic resources , and the market gradually playing a decisive role .

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Huiai Yuan
AU  - Lihong Zhao
AU  - Xiaona Zhong
PY  - 2018/04
DA  - 2018/04
TI  - FDI Inflows, Foreign Trade and Conversion of Government Functions
BT  - Proceedings of the 2018 International Conference on Management and Education, Humanities and Social Sciences (MEHSS 2018)
PB  - Atlantis Press
SP  - 156
EP  - 161
SN  - 2352-5398
UR  - https://doi.org/10.2991/mehss-18.2018.34
DO  - 10.2991/mehss-18.2018.34
ID  - Yuan2018/04
ER  -