Empirical Research On Income Gap Between Urban And Rural Residents From FDI In China

After the reform and opening up, the introduction of foreign capital has promoted China’s rapid economic development, the comprehensive national strength has gradually increased, the foreign capital enterprise has brought a lot of advanced management experience、technology and jobs for China’s economic development. Additionally it takes industry upgrading and people’s income level large improvement, but the same time it led to the deepening of China’s urban and rural residents’ income gap. a large number of domestic and abroad studies have confirmed that the foreign investment have a profound impact on China’s urban and rural income gap. Whether the impact is positive or negative at present is still in the exploration. Therefore, it is necessary to further study of specific situation of China’s urban and rural residents’ income gap.Based on the perspective of FDI, the paper take JiangSu and ZheJiang provinces14years economic statistics data as an example to make a comparative study. JiangSu and ZheJiang provinces has a lot of similarities in geographical location, infrastructure, labor quantity and economic development, but there is a big gap in the introduction of FDI quantity. It takes FDI as a core variable and a hybrid panel regression model to study that whether FDI produce different effect on provinces urban and rural residents income gap or not.Through studies, it is found that FDI in Jiangsu and ZheJiang provinces has positive influence on both urban and rural resident income gap, namely the increasing FDI amount will exacerbate provinces’urban and rural residents income gap. Compare the situation of ZheJiang provinces, JiangSu province is in obvious advantages on the introduction of FDI quantity, and its urban and rural residents income gap is more influenced by FDI. Thus it draw the conclusion:with the increase of FDI inflow, China’s urban and rural residents’ income gap will continue to increase. This study rich perfects the theory of FDI effect on the gap between rich and poor, and reveals that:the current Chinese urban and rural residents income gap is not only influenced by internal factors, also affected by the external factors of FDI. What’s more, with the increasing of FDI, urban and rural residents vary wide.