| With the speed-up development of globalization of the world economy, FDI plays a more and more important role, and impact the economic and social development increasingly, especially in developing countries. As the largest developing country, large inflows of FDI also had a tremendous impact on the Chinese economy and society. First of all, the inflows of FDI can effectively make up for the shortage of funds in China’s economic development; Secondly, it can also bring foreign advanced technology and management experience, and effectively improve the technical level of domestic enterprises through the FDI spillover effect, so as to improve the overall competitiveness of enterprises; But the negative impact of FDI inflows on economy and society should not be overlooked, cause of foreign investment’s resources, regional and industry selectivity, it effects the regional economic development and income distribution in a certain extent.Recently,the income gap between Chinese urban and rural residents has aroused widespread concern in the community, and also become a hot issue of academic research, since the late1980s, the income gap between urban and rural residents expand year by year. But FDI investment is increasing. So, if there is a certain relation between FDI inflows and China serious urban and rural income gap? By which channel FDI impact income gap between urban and rural residents? What are channels? How are the effects? Which manner can be used to improve the effects of FDI on the urban and rural residents’income of different regions? How to give advice and suggestions for the relevant departments to formulate policies effectively? And strive to effectively improve the negative impact of FDI on China’s economic society by exploring and studying on these issues.On the basis of the existing literature, this study try to use panel data of t29provinces, municipalities, autonomous regions to analyze the impact of FDI on China’s urban-rural income gap. on the variables selection, introduce FDI, industrial structure, human capital, foreign trade dependency transportation etc, focusing on the impact of FDI on China’s urban-rural income gap. In addition, for the comprehensiveness of the findings, this study also introduces a squared term of FDI and lags. In addition,1990-2011annual data selected to analyze from a national and regional perspective, and break regions down into seven:the north, northeast, east, central, south, southwest and northwest which is this study differs from existing literature.The study is divided into five parts. The first part is an introduction to analyze the background of the topic, research purpose and significance of research methods and ideas, as well as the a review and comments of existing literature home and abroad. The second part is the basic situation of China’s FDI and urban-rural income gap, which introduce the basic situation of FDI from the overall profile and its geographic, industry, industrial distribution; and the income gap between urban and rural residents from the country as a whole and inter-provincial disparities contrast. The third part of FDI is the theoretical analysis of China’s urban-rural income gap,based on the Kuznets inverted U hypothesis, the dual economic theory, world system/dependency hypothesis to explore the conduction path of FDI affecting the income gap between urban and rural residents. The fourth part is the empirical analysis of FDI on the urban-rural income gap in China, through model selection, data collection and processing, to the final regression and results analysis, and further quantify the extent of the impact FDI on urban and rural incomes. The fifth part is about findings and suggestions.The empirical results show that. From the point of national data view:in the case of one lag order, the income gap between urban and rural residents per capita GDP in line with the "inverted U hypothesis, while there is a" U "-shaped relationship between the urban and rural income gap and FDI, FDI a lag is of no significant effect. And FDI can narrow the income gap between urban and rural residents through the industrial structure, transportation but increase the income gap through human capital and trade. From point of the regional data view:FDI have a negative impact on narrowing the income of urban and rural residents only in the Northeast and East China, other regions are positive; FDI and urban-rural income in east, northeast regional exists "U"-shaped relationship, but the Northeast region variable is not significant, North China, of inverted "U" relationship presented, the variable of the rest regions is not significant and during the regression process has it removed; FDI a lag have a significant positive impact only when narrowing the income gap between urban and rural residents in the North and East. In addition, as to narrow the urban-rural income gap through industrial structure,FDI have negative effects only in east, while other regions all positive effect. Through human capital to narrow the income gap between urban and rural,FDI has negative effect on the region of the northeast, east and northwest, but not significant in the northwest region, other regions showed a positive impact; North, east, south and northwest,FDI shows promotion through foreign trade dependence to narrow the income gap between urban and rural while inhibition in northeast, central and southwest regions;FDI has a negative impact on narrowing the income gap between urban and rural by transport in north and southwest, but southwest region did not pass the test of the significance, other regions have a significant positive impact.Finally, this study put forward several suggestions based on theoretical and empirical analysis as the following:improving the income distribution and social security systems; fully prepared for the "capital attraction" changed into "capital election "; to encourage and guide FDI invest in different area and industry; taking full advantage of the advanced technology at home and abroad, to develop and strengthen domestic enterprises; putting efforts to increase investment in education to accelerate the pace of personnel training; accelerating the economic development of backward areas, to promote the integration of urban and rural areas. |
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