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The Correlational Study of Fdi and Rural-Urban Income Gap

Author: CaiPeiPei
Tutor: XuJianMing
School: Zhejiang Technology and Business University
Course: International Trade
Keywords: FDI transmission mechanism rural-urban income gap policy advice
CLC: F124.7
Type: Master's thesis
Year: 2010
Downloads: 92
Quote: 0
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Abstract


Over the past 30 years, China’s economy has maintained a high growth rate. From 1978 to 2009, our GNP increased at an average annual rate of 10%. Undoubtedly, FDI and exports play an important role, especially the impact of FDI is irreplaceable. On the one hand, FDI led the flow of capital, technology, management, network and so on; improved the formation of China’s comparative advantage and expanded the export market. On the other hand, the introduction of large amounts of foreign capital and its unequal distribution among different areas had an important impact on income distribution, especially rural-urban income distribution. This paper reveals that there’s a’U’relationship between FDI and the growing income gap by empirical research, that is with the small inflow of FDI, it would reduce the income gap, while the large inflow of FDI would aggravate the income gap; and now we’re in the right side of’U’curve, that is, with the increase of FDI, the rural-urban income gap would expand largely. In general, this paper based on theoretical research, combing with the empirical analysis. Accordingly, this article can be divided into the following five chapters:In chapter one the author outlines the background, research significance of this topic, research methodology, structural arrangements, innovation point and weakness. In chapter two, the author reviews the domestic and foreign scholars’research results on this topic.Chapter three and four are core parts of this article. In chapter three the author analyzed the conduction factors of FDI influencing rural-urban income gap from a theoretical point of view, that is, employment structure, industry structure, and spillover, then built the relative conduction model, proving the transmission mechanism of FDI influencing rural-urban income distribution by employment structure, industry structure, and spillover is correct. In chapter four the author analyzed the influence of FDI to our rural-urban income gap. This chapter examined the relationship between FDI and China’s rural-urban income gap through the establishment of panel data model and time series model.In chapter five the author made some recommendations to inhibit rural-urban income gap, including FDI policy and income distribution policy.This research shows that there’s a’U’relationship between FDI and rural-urban income gap, and now we’re in the right side of’U’curve, that is, with the increase of FDI, the rural-urban income gap would expand largely; and put forward some countermeasures.

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CLC: > Economic > The world economic profiles,economic history,economic geography > China's economy > Economic construction and development > National income, national wealth
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