A Study on Correlation between International Trade and Foreign Direct Investment: Evidence for China with ASEAN
|School||Guizhou College of Finance and Economics|
|Keywords||China ASEAN International Trade International Direct Investment|
As two important economic relations of foreign economy,as well as two basic forms of international division of labor,international trade and international direct investment have significant influence on the economic development of a country, and this has been confirmed by many scholars. The relationship between them has been studied by some relevant scholars without qualitative conclusion. With the continual promotion of economic globalization, the continual deepen of the international division of labor and the rapid development of multinational corporation, the relationship between international trade and international direct investment has evolved into a gradual mutual integration from a relationship of substitution or complementary which was held by some previous scholars. Given this, many scholars tried to analyze economic problems in reality with the combination of the two sides, and many achievements have been achieved.However, most of the studies on the international trade and the direct investment, all from the effect of introducing foreign investment on our foreign trade, with little involvement of the relationship between foreign investment and import and export trade. Taking Sino-ASEAN (Association of Southeast Asian Nations) as the research object, this article makes a carding of the theory of international trade as well as the theory of international direct investment, and it analyzes the relationship between them with the methods of theoretical and empirical analysis. Besides, combining the Sino-ASEAN bilateral trade and mutual direct investment, it conducts a scientific and objective analysis on the related statistic data with econometric model to study the relativity of the Sino-ASEAN bilateral trade and mutual direct investment.To be specific, with the previous achievements on the theory of international trade and the theory of the international direct investment, this article makes an analysis on the current situation, features, and the existing problems of the Sino-ASEAN bilateral trade and mutual direct investment with the methods of graphic analysis and comparative analysis, and it demonstrates the relationship between trade and investment, which provides a support of the scientific basis and a theoretical and experiential reference to the following experimental analysis. The main purpose of the experimental analysis in this thesis is to study whether there is a casual relationship between Sino-ASEAN trade and direct investment. The concrete analyzing steps are as follows: First, The choosing of the quantity and variables. The data in the samples are actual direct investment to China from ASEAN from 1984 to 2009 and annual data of the export and import trade to ASEAN from China. In this part, the analysis software Eviews5.0 in econometrics is adopted with the data proceeding and the computation empirical research. Second is the ADF inspection of the stability of the temporal series. The inspection is used to decide stability of the temporal series. Third is Granger Causality Test. It is used to demonstrate the relationship between foreign direct investment and export trade. Last, the co-integration test between the data. It is used to determine whether there is long-term stable relationship between direct investment and international trade. Based on the conclusion from the theoretical analysis and empirical analysis, this article analyzes the reason and puts forward some related countermeasures and suggestions.