Abstract:Based on the empirical data from 1990 to 2011 in Jiangsu Province, this paper uses state-space model to examine the dynamic impact of FDI on the energy efficiency of Jiangsu Province and its transmission mechanism. The empirical results show that FDI has a stable positive impact on energy efficiency, and this impact has an enhanced tendency in recent years. From the transmission channels, the transmitting effect of technological progress is stronger than that of industrial structure. From the transmission process, the impact of FDI on energy efficiency has been impaired in the first process of each transmission channel. It is necessary for Jiangsu Province to improve the investment environment, enhance the regional economic construction and guide FDI towards service sectors in the use of FDI to improve energy efficiency effectively.