Empirical analysis on the effect of economic opening on China's economic growth

Weifu Zhang () and Zhigang Zhu
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Weifu Zhang: School of International Business & Economics, Nanjing University of Finance & Economics, Nanjing 210046, China
Zhigang Zhu: School of International Business & Economics, Nanjing University of Finance & Economics, Nanjing 210046, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2007, vol. 2, issue 4, 623-643

Abstract: Based on an adjusted Solow economic growth model, using econometric tools such as cointegration test and Granger causality test, taking the economic factors such as foreign trade and foreign investment into account, this paper makes regression analysis on the effect of economic opening on China's economic growth by using the data from 1985 to 2004. The analysis indicates that the domestic capital input is still the primary element that promotes China's economic growth, by contrast, the effect of foreign trade and foreign investment is faint. It is a bidirectional causality between foreign trade and economic growth, and the adjusting velocity of trade is larger than the foreign direct investment on the balance of the China's long-time economic growth.

Keywords: foreign trade; FDI; economic growth; Granger causality test (search for similar items in EconPapers)
JEL-codes: F21 O1 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:2:y:2007:i:4:p:623-643

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