A Study of Relationships between Foreign Trade and Economic Growth

With application of panel data model, data collected from period of 1992～2014 in twenty-five cities and provinces have been used to study relationships between foreign trade and economic growth. Besides, study has also been conducted in issue of endogenous trade with the method of instrumental variable. The result shows that development of foreign trade has boosted economic growth with obvious contribution made by fixed-asset investment. In long-term view, foreign investment has also played its positive role in economic growth.