Empirical Research on the Effect of FDI on Economic Growth-Evidence from Shanghai

Economic globalization, entry into WTO and the status of national economic center make Shanghai the highland for FDI in China. Based on time series data of Shanghai from 1981 to 2008, this paper carries out empirical research on relationship between FDI and economic growth in Shanghai by using ADF test, Granger causality test and multivariate regression model. The result shows that FDI is the Granger cause of economic growth in Shanghai. Meanwhile, in view of capital itself, capital attachment as well as capital circulation, the spillover effect of FDI is also very obvious, and in succession brings positive effect to economic growth of Shanghai.