Open AccessStudy on the Relationship of FDI and Processing Trade Value-added Rate —Based on the Data from Shandong Province of China
Author(s) -
Hongxia Sui
Publication year - 2020
Publication title -
journal of physics. conference series
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.21
H-Index - 85
eISSN - 1742-6596
pISSN - 1742-6588
DOI - 10.1088/1742-6596/1639/1/012103
Subject(s) - china , foreign direct investment , granger causality , cointegration , value (mathematics) , international trade , economics , international economics , economic geography , business , econometrics , geography , mathematics , macroeconomics , statistics , archaeology
Based on the data of Shandong province in china over the 1998-2017 periods, this paper examines the impacts of inward FDI from Japan, Korea and USA on the Processing Trade Value-added Rate (ADVA) respectively. The cointegration equation indicates Japanese and Korean direct investments in Shandong Province are positively correlated with ADVA, but American direct investment is negative. There is no evidence that the FDI from Japan, Korea and USA have effects on the processing trade value-added rate of Shandong province as they are not Granger causality of ADVA. The power to promote the transformation and upgrading of Shandong’s processing trade comes from inside instead of outside, and independent technology innovation is critical.