An Empirical Study About The Effect Of FDI On Income Inequality In Jiangsu Province

This paper focuses on the effect of FDI on income inequality in Jiangsu province,studies the theoretical and empirical links between FDI and income inequality by using the latest statistics.After reviewing some relevant domestic and foreign literatures,we analyze the current situation of FDI and income gap in Jiangsu Province.Then,the ways that FDI impacts income gap from both micro and macro perspective will be discussed, and an empirical model will also be established.By using panel data we estimate the effect of FDI on income gap.In addition, this paper also takes the factor endowments into account,and studies the impact of FDI on income inequality based on factor endowments characteristics.The results show that FDI increases the income gap of Jiangsu Province.The factor endowments also explain income gap.Land and capital have a positive effect on income inequality while labor have the negative effect. The interaction between a special endowment and FDI has different effects on income distribution.The results also show that GDP per capita,government expenditure and urbanization have considerable effects on income inequality.