Investment, consumption and export are generally considered to be three carriages stimulating economic growth. With the integration of the world economy and globalization, trade between countries and areas is growing rapidly, and foreign trade is playing an increasingly important role in one economy. Based on the relevant data of Hunan from 1985 to 2005, this paper analyzed effect of foreign trade on economic growth in Hunan from a qualitative perspective and found that the effect was small, after a historical analysis on foreign trade and economic growth. Then, with the help of Eviews3.1, from a quantitative point of view, the paper did an empirical research on the relationship between foreign trade and economic growth of Hunan by using approaches of regression analysis, co-integration technique and Granger-causality test. It is found that, there exists a comparatively strong correlation among import, export and GDP in Hunan, there also exists a long-term, stable, balanced relationship among them, and import growth, export growth and foreign trade growth are not Granger reasons for GDP growth, however, GDP growth is Granger reason for import growth, export growth and foreign trade growth; export growth is Granger reason for import growth, but import growth is not Granger reason for the growth of export. Finally, based on the conclusions, some suggestions were made for the interactive development of foreign trade and economy of Hunan.
Key words:Foreign trade; Economic growth; Regression analysis; Co-integration test; Causality relationship