Empirical analysis on impact of FDI on the level of urbanization in costal areas
Abstract: There is a close
relationship between FDI and the level of urbanization. the objective of this
research is to analyze the relationship between FDI and the level of
urbanization in Jiangsu and Guangdong provinces in costal areas.
Design/methodology/approach: The author uses the modern econometric methods
by panel unit root test, cointegration test, random effects models and fixed
effects models, and the data of FDI (2000-2012), urbanization rate, industrial
structure and regional GDP of Nanjing, Xuzhou, Suzhou, Wuxi and other 13 cities
in Jiangsu Province, Guangzhou, Shenzhen and other 19 cities in Guangdong
province, researches the relationship between FDI and urbanization rate.
Findings: Models show, FDI was closely correlated with urbanization rate
in Jiangsu province and Guangdong province, the highly correlated with
industrial structure, while it negatively correlated with the growth of GDP,
and the degree of correlation is not high in Jiangsu province, but the high
negative correlation in Guangdong province. The results shows the industrial
structure and the urbanization rate mainly cause FDI growth.
Research limitations/implications: There are many provinces in costal
areas of China, this paper just research the relationship between FDI and the
level of urbanization in Jiangsu province and Guangdong province, there are
some limitations in the study areas and results.
Originality/value: The study was the first to successfully apply on
random effects model and fixed effects model to study the relationship between
FDI and the level of urbanization in coastal areas by competitive analysis.
Guangdong and Jiangsu province are the most developed regions, they are the
most representative provinces in costal areas of China. Taking these two
province as an example, we can analyze the relationship between FDI and the
level of urbanization in central and western regions.
Author: Cao Can-Ming, Duan
Jin-Jun
Journal Code: jptindustrigg150026
