| With the rapid acceleration of the process of globalization in the1990s, the issue of income distribution has become the major difficulty faced by all countries, especially developing countries, and the impacts of foreign trade on income distribution has also become one of the hot issues in the current economic circles. However, with the rapid development of foreign trade and significant improvement of residents’living standard, the urban-rural income disparity in Shaanxi province is increasingly widening. Does foreign trade has any influences on Shaanxi’s income growth and urban-rural income disparity? If it does, what kind of impacts are these? What is the impact mechanism? These questions are the subjects of this study and what this study tries to answer to. Study on these issues not only makes scientific and rational strategy guidance for the development and opening up, but also provides scientific theoretical basis for the policy which aims to improve the income and to narrow the gap between urban and rural areas in Shaanxi province from the perspective of foreign trade. Therefore, this study has important theoretical and practical significance.Based on International trade, Economics, Econometrics, Statistics and other related theories, learning the latest theoretical and empirical findings and using the data of Shaanxi Statistical Yearbook between1990and2011, this paper studies the current status of foreign trade development, income growth and urban-rural income disparity in Shaanxi province, also analyzes the impact of foreign trade on income growth and urban-rural income disparity in Shaanxi from the perspective of both qualitative and quantitative.First, in order to provide theoretical basis for the follow-up studies, this paper makes a review of the classical theories about the relationship between foreign trade and income growth, income disparity and analyzes the mechanism for which foreign trade affects income growth and income gap. Second, this paper analyzes the status of foreign trade rapid development for overall and northern, southern and central parts of Shaanxi province and income growth since1990. It also sums up the characteristics of income growth in the past21years and analyzes the ratio of urban to rural income and Theil index to reflect the level of income disparity. Then, using econometric methods and using overall household income as dependent variable, total foreign trade and total fixed assest investment as independent variables, this study establishes foreign trade—income growth model, analysing the impact of foreign trade on residents’ income growth in Shaanxi province. Finally, the paper makes a theoretical discussion about the mechanism for which foreign trade affects urban-rural income disparity and builds up the econometric model to study the impact of total foreign trade, exports and imports on the urban-rural income gap.The results show that there is a strong correlation between foreign trade and overall household income in Shaanxi province, and it has a realistic economic significance of foreign trade promoting the growth of income. The development of foreign trade expands the income gap between urban and rural areas in Shaanxi province, the relationship between exports and expansion of urban-rural income gap is quite robust. Although the increase of imports could narrow the urban-rural income gap, this effect is hardly significant. Foreign trade leads to the expansion of the urban-rural income gap through the pathway of deteriorating trade terms, technological progress, trade liberalization in agricultural products, extensive model of foreign trade growth.According to the research results, combined with the actual situation in Shaanxi, this paper proposes relevant policy recommendations from the aspects of upgrading industrial structure, promoting the export of agricultural products, improving the rural human capital, perfecting distribution system of market elements to increase household income and gives a future direction of this study. |
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