The Frontiers of Society, Science and Technology, 2023, 5(3); doi: 10.25236/FSST.2023.050318.
Youzhe Wang1, Jingtao Zhang2, Yue Teng3, Huaiyuan Zhang2
1School of Business, Guilin University of Electronic Technology, Guilin, China
2School of Law, Zhongnan University of Economics and Law, Wuhan, China
3School of Accounting, Zhongnan University of Economics and Law, Wuhan, China
Since the reform and opening up, the scale of foreign direct investment (FDI) in China has been expanding, and along with the expansion of FDI, China's economic growth has become more and more favorable. In order to explore the effect of FDI on China's economic growth, this paper uses the time series data from 2000-2021, through ADF smoothness test, co-integration test, and also based on Cobb-Douglas production function to establish a regression model to analyze the effect of economic growth brought by FDI, and add other factors affecting economic growth, comprehensive analysis of foreign direct investment on economic growth. Then, we analyze the causal relationship between economic growth and FDI through Granger causality test. Finally, based on the empirical results, suggestions are given on how to make FDI better promote economic growth.
Foreign Capital Utilization; Economic Growth; Cobb Douglas Production Function; Granger Causality Test
Youzhe Wang, Jingtao Zhang, Yue Teng, Huaiyuan Zhang. Analysis of the Impact of FDI on Economic Growth Based on Cobb-Douglas Production Function. The Frontiers of Society, Science and Technology (2023) Vol. 5, Issue 3: 111-120. https://doi.org/10.25236/FSST.2023.050318.
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