Foreign Direct Investment, Trade and Economic Growth in Taiwan

Abstract

Taiwan is the capital-open region. To understand the FDI, trade and economic growth should be one of the worthy studies on the question. This paper uses the data from 1978 to 2009 in Taiwan, and uses the VECM model to analyze the impact of foreign direct investment on economic growth in Taiwan. The results of the VECM model for FDI and economic growth in Taiwan have both the long-term existence of the cointegration relations and the reverse relationship.