Empirical Analysis of the Relationship between FDI and Processing Trade: 1985-2008
Processing trade has gradually replaced the general trade, becoming China’s main trade pattern. Then, what’s the relationship between FDI and processing trade This paper, based on VAR model, by employing Granger causality test approach, impulse response function and variance decomposition, gives an empirical analysis and test of the dynamic correlation between FDI and processing trade. The empirical result denotes that there exists bilateral Granger causality relationship between FDI and processing trade. For a short period, the impact of FDI on the responsiveness of processing trade is more intense. The impact of processing trade on the responsiveness of FDI is also more intense and the volatility of fluctuations is larger; for a long period, there exists a long-run stable relationship between FDI and processing trade.
FDI processing trade VAR Granger causality test impulse response function variance decomposition
Wang Xijun
School of Economics & Management,Weifang University, Weifang, 261061, China
国际会议
沈阳
英文
675-682
2011-11-22（万方平台首次上网日期，不代表论文的发表时间）