Research On The Influence Of FDI On Regional Income Gap

FDI is regarded as one of main manifestations of globalization, which has become the focus of scholars and policy makers in recent years. Undoubtedly, the inflow of FDI has brought increased investment, technological progress and industrial agglomeration in China. FDI is the synthesis of capital, knowledge and technology. It has promoted Chinese economic growth, and it also has effect on regional income gap because of regional distribution disparity of FDI. The paper takes eight economic zones as research object, takes measure of inter-region and Intra-region gap of income and FDI by the use of theil index. Then we study the relationship between FDI and regional income gap through the method of quantitative analysis. In the end, we put forward some suggestions about how to reduce regional income gap from the perspective of FDI, in order to provide reference information for the relevant decision-making.The results show that compared with intra-region gap, inter-region gap has higher contribution to general gap both in income gap and FDI gap of eight economic zones.Overall, FDI has positive correlation with inter-region income gap, that is to say, FDI is an important factor to enlarge Chinese inter-region income gap, which is consistent with world system /dependency theory. Within eight economic zones, FDI has different correlation with intra-region income gap. FDI has inconspicuousness correlation with intra-region income gap in eastern coast district, middle reach of Yellow River and great northwest region; FDI has positive correlation with intra-region income gap in northeast region, middle reach of Yangtze River and great southwest region, that is to say, the flow of FDI enlarges intra-region income gap in these districts; FDI has negative correlation with intra-region income gap in northern coast region, southern coast area, that is to say, the flow of FDI reduces intra-region income gap in these districts.To alleviate income gap in eight economic zones effectively, every zone should base upon its practice and bring FDI's full play to economic development, and mainly take practice from the following seven aspects: strengthening international economic cooperation and taking effort to build regional economic circle; emphasizing the use mechanism of talent and accumulating regional human capital effectively; basing upon region development strength and creating distinctive economy; undertaking transfer of industry actively and prompting the upgrade of industrial structure; enhancing infrastructure construction and making hard to improve hard investment environment; relying on all levels of government function, greatly improving soft investment environment; innovating inviting investment approach and achieving harmonious development of domestic and foreign enterprises.