Research On Impacts Of Export Openness And Market Potential On Regional Wage Gap In China

With the pace of opening up, the level of China's national economy is improving gradually and GNP grows rapidly. Meantime, we have to admit and realize that regional economy has polarization. Especially, the gap of regional wage that represents income level grows wider gradually. Finding the reason of regional wage gap and how to prevent this unharmonious phenomenon expanding is an important issue.This paper made a review of the relevant literature of studying the factors which affect regional wage gap, the export openness and regional market potential contribution rate are the key points, we made an exploration of relevant theoretical and empirical research. Secondly, through the study of data and development situation in recent years, this paper gives a clear and direct understanding. After that, Elaborate the relative theory that how the export openness and regional market potential affect the regional wage gap.this paper absorbed and learned their effective research methods and ideas, establishing a theoretical model that export openness and regional market potential ability affect regional wage gap in the framework of new economic geography. Next, based on the 1995-2008's panel status of 29 provinces and municipalities, using reasonable regression methods, this paper made an empirical study of export openness, regional market potential ability and regional wage gap. The analysis included full sample and sub-sample analysis. Based on the study, this paper shows:First, the regional market potential is one of the very important factors of which impact regional wage gap, they are positively correlated, large regional markets can attract domestic investment and manufacture of other parts of our country to develop the regional economy, making the average wage of workers in this region continue to increase. Second, export openness is another important reason for regional wage gap, they are positively correlated too. the more export shows the area has more attraction to fascinate trade of foreign countries, it will further strengthen the industry concentration, so the level of average wage will increase again. Fourth, through the empirical test, we can see the two factors is substitute for one another in the effect process of the regional wage gap. Finally, this paper suggests policy recommendations and measures of narrowing regional wage gap.