Analysis of Co-integration on the Relation between Foreign Direct Investment and Interest Rate Parity
In the context of the capital ontrol , Foreign direct investment (FDI) is increasingly becoming the main one way of the hot money inflows. Although FDI for Chinas development has brought enormous contributions, at the same time the hiding dark matter in FDI impact and threat Chinas economic and financial security. For the perfect gain the relationship between interest rates to FDI, this paper innovatively introduces this interest rate parity. Through utilizing co-integration and error correction model, the paper analyzes the relationship between FDI and the RMB Base Rate against the U.S. Base Rate. The analysis shows between FDI with the interest rate parity exists long-term and short-term stable relationship. Then through the Granger causality test, we find that interest rate is the reason for FDI growth, and conversely, the conclusion isnt true.
FDI interest rate parity hot money co-integration error correction model Granger causality
TI Tao CHEN Lixin
School of Business Administration, Liaoning Technical University, Huludao, China, 25105 School of Business Administration, Liaoning Technical University, Huludao, China, 125105
国际会议
大连
英文
218-223
2011-06-30（万方平台首次上网日期，不代表论文的发表时间）