Research on the Impacts of Foreign Direct Investment to the Service Industry: Cointegration Analysis and Grainger Causality Test Based on Data of Henan Province during 1996~2014
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Tong Yang, Tieshan Wang, Guiqing Gu
Based on the theory that FDI will cause technology spillovers and capital will promote the substantial increase in production, FDI will contribute to the economic contribution of Henan’s tertiary industry. By collecting the data from 1996 to 2014, the first two sets of time series are tested and the same order single-single meets the test premise of Engel-Grange method (EG). The data is analyzed by least squares regression analysis and then the residuals. The values were tested by ADF and finally the causal relationship between them was tested by the Granger causality test model. Determining FDI is the main reason for promoting the growth of Henan’s tertiary industry. It is concluded that FDI can certainly promote the development of the tertiary industry in Henan Province to a certain extent. The comprehensive revitalization of Henan’s economy requires the support of foreign direct investment.
FDI, service industry, cointegration analysis, grainger causality test