The Empirical Study Of FDI And Regional Income Gap Based On Panel Data Model

As an important method for multinationals to participate in the international competition and strengthen the comprehensive strength, FDI (Foreign Direct Investment) had already become one of the main accelerant of regional economy for various countries. At the same time, it also widened the disparity of regional economic development in certain extent. The regional income gap refers to the regional income difference following the rapid economic development in various regions. This thesis quoted the Theil index as the index of measuring regional income gap, and weighed the income gap among regions. It is necessary to take the further discussion and empirical analysis to identify the factors that take part in FDI influencing the regional income gap.Since Reform and Opening, FDI has attained enormous development in China, and become one of the engines driving economic boom. Both from the vertical growth rate, and the horizontal FDI mode, FDI in China can be regarded as the miracle of economic development of the world. But, while FDI rising in high speed, the regional income gap is under constant enlarging too, which is an important issue for developing country. The statistic data shows that China has already become one of the most income inequality countries. People can't help to link these two phenomena together. Whether the development of FDI causes the enlargement of regional income gap or not? If they have relevant relations, is it a positive correlation or negative correlation between FDI and regional income gap? Will such relevant relation change in different regions? Because FDI has different influence on income gap in a lot of categories, through which factors does it influence the regional income gap? At present, it lacks the comparatively effective and abundant theoretical and empirical analysis in studying which factors in FDI influenced regional income gap in China. In order to answer this question, this thesis divided China into eight major regions according to the close degree of relationship in economic development at first, then based on statistical data in 1987-2005, adopted the method combined both quantitative and qualitative analysis, and standardized and empirical analysis, followed the thinking of proposing the problem, analyzing the problem, and solving the problem, launched proving of questions in FDI's influencing income gaps of eight major region, finally established the panel data model, which demonstrated the influence of FDI on regional income gap, through analyzing the indicators like industrial structure, the amount of capital investment, the quantity of employment, human capital, and the technical indicator (TFP), etc.The whole thesis includes four parts. First part is the introduction, which delivered the background and significance of the study, literature review, and introduced the structure and approach of the thesis; Second part is a theoretical foundation of whole research, which illustrated the economic indicators of measuring the relationship between FDI and regional income gap and explained influence factor and mechanism of FDI influencing the regional income gap from different perspectives; The third part is the core of this thesis, which analyzed each influence factor of FDI influencing the regional income gap based on the panel data analytical method, both using the individual and comprehensive analytical technology, and drew the empirical conclusion that FDI through various kinds of factors influence the regional income gap; The fourth part expatiated the necessity of analyzing the influence factors of FDI on the regional income gap, then provided the policy recommendations to improve FDI utilization ratio and dwindle regional income gap to each influence factor.