Abstract:

The relationship between foreign direct investment (FDI) and international trade has received considerable attention in the past few decades. The article analyzes the impact of outward foreign direct investment on trade competitiveness based on foreign direct investment motives by Dunning, and makes an empirical study using VAR model, to avoid false regression of OLS econometric model since the value of OFDI, import and export data increases gradually. The result shows that China's foreign direct investment has a positive role on trade competitiveness, which means structural optimization of import and export.

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