A Research on the Relationship between FDI and Jiangsu’s Regional Economy Disparity

Through reading and summarizing relevant articles, the authors analyze two different kinds of effects that FDI influence the regional economy. Location and digesting ability reflects such non-equilibrium. By using regression analysis, the authors discover, in south Jiangsu, which the unit FDI increase contributes most to the GDP development, with middle and north Jiangsu lagging behind. The regression coefficient is 1.198, 0.429 and 0.572 respectively. Considering the index of digestion ability, unit FDI increase and unit GDP contribution rate still share strong relevant relationship. However, the coefficients change. The effects that FDI stimulate GDP growth are weakened, been made up by the en-dogenous ability. The granger test shows that in south Jiangsu, there exists a cycle of accumulative effect, namely both the FDI increase and the GDP growth do well with each other. However, in the rest of Jiangsu province, such effect is not obvious. Considering the elements of location and digesting ability, this paper offers tactics for Jiangsu for a better coordinate of future development