The Effects Of Service Sector Industry FDI On Income Gap: Industry-level Evidence From China

Along with the advance of economy more and more problem are brought to ourattention, one of which is that income inequality. Unreasonable income gap is notonly affects the economic growth but also endangers social harmony and stability. Thecontroversial issue is often brought into academic focus. Although there are manyfactors to influence the income of workers and income inequality, FDI inflows mustbe an important factor which cannot be ignored in recent China. Based on thisjudgment, more and more scholars study the effects of FDI on income gap throughempirical analysis. Most of theory research on the effects of FDI on income gapconcentrated on manufacture industry. While the research of FDI in service sectorindustry is still few. Usually we use mathematical deduction to test whether the FDIcan expand the income gap between the industries. From the macro view of nationallevel to study service sector FDI has a certain theoretical and practical significance.In this paper, we use international investment, international trade in services,multinational business management and other related discipline knowledge to studythe influence of income gap. The full text is divided into six chapters. The firstchapter is to maintain background, significance, the research status from home andabroad and summarized the research method and so on. The second chapter presentedtheory of the relationship of FDI and income gap, the standers of how to choose anation to invest. The third chapter introduced our country service sector industry FDIinflows and the development of service sector industry income gap, based on thetheoretical analysis and actual data of China. Put forward some suitable index whichcan determine the income gap. The fourth chapter analyzes factors which areinfluencing the income gap and the trends of income gap of service sector industryand then discusses the mechanism of how to effects service income gap of our countryand finally find the revenue of the impact of FDI in services. Fifth chapter is explorethe effect of FDI in service sector industry income gap by using the method ofregression analysis and the result shows that China’s FDI investment has nosignificant influence on the income gap. So the FDI inflows will lead to the growth oftrade in services while not to lead income inequality. Chapter six is the last one of thetext that is to give a conclusion.In this paper, there are two innovation points. First one is the research of FDI inservice sector industry is different from the perspective of national income gap. So it is good to weakening the characteristics of developing area and it expands the studypattern of a certain specific provinces. The second one is we adopt the latest actualdata and insert education variable which may be do better in the model to inspect therelationship between FDI and service sector industry income inequality. But in thispaper, in the absence of the service revenue and services FDI into the relationshipbetween the empirical test, the future research on this issue is worthy of the author tocontinue efforts to deepen.