The Empirical Research On The Impact Of Trade Liberalization On Domestic Income Distribution Gap

With the fast development of economy and the process of globalization, China is facing a serious challenge, the growing income gap, it has become an important issue of social harmony and economic development, and a focus of attention of the community. This paper analyses the effect of trade liberalization on income distribution gap from long-term and short-term perspectives. We find that trade liberalization is an important cause that lead to income distribution gap.This paper is divided into six parts.In the first part, the article introduces the research background and significance of this subject from theoretical and practical aspects, it proposes the necessary and importance of studying the impact that trade liberalization put on income distribution gap, and then describes the content, way of studying and the innovation of this paper. At last, it presents the direction of future research.In the second part, we review the relevant papers, which are divided into foreign and domestic status. Despite the very different conclusions, but the conclusion that trade would have an impact on income distribution is unchanged.In the third part, at first, we define the concept of trade openness and income distribution, and then describe the latest development of trade globalization and income distribution gap. At last, describe how to measure trade openness and income distribution gap.In the fourth part, the view that trade put an impact on domestic income distribution has been unanimously recognized by scholars, but how and in what channels does trade affect income distribution, This chapter will analyze and summary it. We conclude that trade impacts income distribution through the following five channels: technology improvement, price of commodities, structure of industry, foreign direct investment and impact of government.In the fifth part, we give an empirical analyze on trade openness impacts the income distribution gap by the data we collected, and then analyze and summary the results. Combined with the latest measurement of trade liberalization, we found an empirical model by using multiple regression analysis and co-integration test-based VAR impulse response analysis. We select the 1978-2007 time series data, the long span of time, to analyze the impact that trade liberalization put on income distribution inequality.In the sixth part, based on the above analysis we get conclusions and give the relevant policy recommendations.