Relationships between exchange rates, economic growth and FDI in China: An empirical study based on the TVP-VAR model
oleh: WangShu-ping,WeiXiao-meng
| Format: | Article |
|---|---|
| Diterbitkan: | Institute of Technology and Business, České Budějovice 2017-01-01 |
Deskripsi
Thispaperinvestigatestherelationshipsbetweenexchangerates,economicgrowthandforeigndirectinvestmentthroughatime-variantparameterVARmodelusingmonthlydatafromChinafortheperiod2001-2016.Thefocusisonthereactionofeconomicgrowthtoashockchangeinexchangeratesorforeigndirectinvestment.Thedynamicimpulseresponsefunctionshowedthattherelationshipsdonotinstigategreatchange.ApositiveshockintherealexchangerateslowsdownFDIinflows,withnoevidencetosupportthecontractionarydevaluationtheoryinChina,whichsuggeststhatanincreaseintherealRMBexchangerategenerallycausesanegativeinfluenceonChina’seconomicgrowth.TheempiricalresultsofthisresearchcontradictwhatintuitionsuggestsandindicatesthatFDIhasgeneratedanambiguouseffectoneconomicgrowthinthepastfewyears.Before2008,shockchangesinFDIwouldcauseeconomicgrowthtolagforoneperiod.Sincethen,thelagphenomenonhasdisappearedduetobetterregulationandamaturingfinancialmarket.