Research on the Influence of Foreign Direct Investment on Regional Economy

Abstract

Foreign direct investment is always an important part of Chinese economy. However, China’s attitude toward FDI has changed in recent years because China wants development with higher quality. Based on official data from the National Bureau of Statistics of China, this article compares and analyzes the impact of investment on development in different regions. In this article, multiple linear regression model has been used in order to figure out the relationship between FDI and China’s regional economic development. The reason we choose this model is because economic development is affected by multiple variables. By using this model, we figure out that there is a significant positive correlation between FDI and GDP from a country-wide perspective. From the perspective of different regions, this article finds that there is a significant positive correlation between FDI and GDP in the eastern and western regions, while there is no significant relationship between FDI and GDP in the central region. The result of this research shows factors that affect the effectiveness of FDI, which can help the country to utilize FDI better.