The Impact of Foreign Trade and Foreign Direct Investment on China's Economic Development: An Empirical Approach

Year 2024, , 237 - 255, 02.03.2024

Nurbay Sey

https://doi.org/10.24988/ije.1335973

Abstract

China achieved rapid economic development as a result of the reforms implemented in 1978. It is widely believed that foreign direct investments and foreign trade, which increased alongside these reforms, had a significant impact on this rapid economic progress. Consequently, this study sought to examine the effectiveness of foreign direct investments and foreign trade in facilitating China's rapid economic growth between 1978 and 2016, utilizing the SVAR method. Within the scope of the study, three variables were utilized: the growth rate, the ratio of foreign direct investments in GDP, and the ratio of foreign trade volume in GDP. In the initial part of the study, the growth process, foreign direct investments, and foreign trade of China were evaluated using graphical representations. In the following section, in the empirical part, initially crisis periods were incorporated into the model as a dummy variable in order to prevent crisis periods to affecting the results. Following this, unit root tests were conducted, and it was concluded that the series were non-stationary at the level but became stationary after taking their first differences. Therefore, in this study, the first differences of the series were utilized for analysis. In the subsequent part, autocorrelation and heteroskedasticity tests were applied to the model. The results of these tests indicated that the model is suitable for evaluation. Consequently, in the next part, the study proceeded to evaluate the impulse-response functions and variance decomposition results of the model. As a result of these analyses, it was concluded that both foreign direct investments and foreign trade, but especially foreign direct investments, have a significant impact on China's economic growth.

Keywords

SVAR Model, China, Growth, Foreign Trade, Foreign Direct Investments

Çin'in Ekonomik Gelişiminde Dış Ticaret ve Doğrudan Yabancı Yatırımların Etkisi: Ampirik Bir Yaklaşım

Abstract

Çin, 1978 yılında yaptığı reformlarla birlikte hızlı bir ekonomik gelişme kaydetmiştir. Bu hızlı ekonomik gelişmede reformlar ile birlikte artan doğrudan yabancı yatırımların ve dış ticaretin etkili olduğu düşünülmektedir. Dolayısıyla bu çalışma, Çin'in 1978-2016 yılları arasındaki hızlı ekonomik büyümesinde doğrudan yabancı yatırımların ve dış ticaretin etkinliğini SVAR yöntemini kullanarak incelemeyi amaçlamıştır. Çalışma kapsamında büyüme oranı, doğrudan yabancı yatırımların GSYİH içindeki oranı ve dış ticaret hacminin GSYİH içindeki oranı olmak üzere üç değişken kullanılmıştır. Çalışmanın ilk bölümünde Çin'in büyüme süreci, doğrudan yabancı yatırımlar ve dış ticareti grafikler yardımıyla değerlendirilmiştir. Takip eden bölümde ampirik kısımda, kriz dönemlerinin sonuçları etkilemesini önlemek amacıyla ilk olarak kriz dönemleri kukla değişken olarak modele dahil edilmiştir. Bunu takiben birim kök testleri yapılmış ve serilerin düzeyde durağan olmadıkları ancak birinci farkları alındıktan sonra durağan hale geldikleri sonucuna ulaşılmıştır. Bu nedenle, bu çalışmada serilerin birinci farkları analiz için kullanılmıştır. Takip eden bölümde modele otokorelasyon ve değişen varyans testleri uygulanmıştır. Bu testlerin sonuçları modelin değerlendirme için uygun olduğunu göstermiştir. Dolayısıyla, bir sonraki bölümde modelin etki-tepki fonksiyonlarının ve varyans ayrıştırma sonuçlarının değerlendirilmesine geçilmiştir. Bu analizler sonucunda, hem doğrudan yabancı yatırımların hem de dış ticaretin, ama özellikle doğrudan yabancı yatırımların, Çin'in büyümesi üzerinde önemli bir etkiye sahip olduğu sonucuna varılmıştır.

Keywords

SVAR Modeli, Çin ekonomisi, Büyüme, Dış Ticaret, Doğrudan Yabancı Yatırımlar

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