An Empirical Research on Relationship between Foreign Direct Investment and Technological Innovation Capability in Hubei Province of China

摘要

Using data from Hubei province of China, this paper employs co-integration tests and Granger causality to investigate the relationship between FDI and patent authorization during the period of 1988 to 2008.The empirical evidence verifies that stable equilibrium relationship exists between FDI and patent authorization in the long run. Known by Granger causality test, FDI is the Granger cause of enhance Hubei Province's technological innovation capability. And based on the conclusion, the author puts forward policy recommendations.