An Empirical Analysis on the Effect of Foreign Direct Investment on Shenzhen's Economic Growth

The paper studies the relation between FDI and labor employment and fixed capital investment and Shenzhen's economic growth by taking a linear regression and data analysis of the time series of FDI and labor employment and fixed capital investment and economic growth of Shenzhen from 1979 to 2005. The Granger cause-and-effect analysis shows that there exists a unilateral cause-and-effect relation between them. The analysis based on co-integration test and error correction model shows that there is long-term dynamic equilibrium relationship among Guangdong's economic growth and FDI and labor employment and fixed capital investment.