Empirical Analysis of Foreign Direct Investment, Foreign Trade and GDP with Energy Constraint

摘要

Since China’s reform and opening up, FDI and foreign trade have played important roles in promoting national economic growth. Nowadays, energy constraint is becoming more and more serious. In this paper, the Granger causality test shows FDI and foreign trade Granger cause GDP growth while energy Granger causes foreign trade and GDP growth too. There is a cointegration relation among FDI, foreign trade, energy and GDP. The forecast of vector autoregressive model reveals that energy elasticity and energy consumption per GDP will reduce, but there is still a large gap in reaching the goals in the 11th five year plan. The impulse responses show that shock of FDI, foreign trade and GDP will lead to improvement of the energy efficiency, while the shock of energy will have a negative effect on GDP in a long run. The variance decomposition method is employed to separate the variation in an endogenous variable into the component shocks to the model. The results show that FDI and foreign trade are main influential factors for energy consumption, and foreign trade is the main influential factor for FDI and GDP growth. Therefore, China should encourage FDI technology transfer and adjust export structure to reduce energy consumption in order to keep sustainable economic development.