International Trade, FDI And Urban-rural Income Gaps On The Basis Of The Panel Data Of The Western China

With the integration of the world economy and regional economic, as the important measures for a country's open-up degree, international trade and FDI plays a vital role. China, as the largest trading country, the total trade volume ranks first in the world year after year. Today, China is not only a "world factory", but also is the "world market", the contraction between China and world is more and more closely. After the reform and opening up, China has been actively drawing foreign investment. With the improving policies and regulations and the continuous improvement of investment environment, China has become one of the most attractive countries in drawing FDI.Continuous development of foreign trade and introduction of FDI plays an essential role in China's economic development, and providing developing funds, overseas markets, technology and management innovation for economic development. However, they also bring some negative impact on the country's economic development:affects the income distribution of agricultural and non-agricultural sector workers, especially the income gaps between rural residents and urban residents.In recent years, the study about income distribution has been the hot spot. Especially domestic researchers focused on the study of the applicability of Kuznets "inverted U" curve in China, if the international trade and FDI have the significance impact on the income gaps between rural residents and urban residents.This paper is divided into six parts:The first part of the introduction, including the background and significance, research content and technical route, research ideas and methods; the second part, the paper sorts the literatures by the foreign literatures and domestic literatures; the third part, the paper reviews the theory of international trade, FDI and income gap, such as the Kuznets curve, dual economic structure etc; The fourth part, the paper choose trade dependency, FDI dependency, Theil index for international trade, FDI and income gaps, and descriptive analyses; the fifth part, the paper based on panel data, select the fixed effects model, related variables feasible generalized least squares (FGLS) estimate; the sixth part, based on the above analysis, give the conclusions and suggestions of this study.On the basis of the existing research, on the use of panel data 10 western provinces and autonomous regions, the study choose trade and FDI as two main explanatory variables, and select per capita GDP, human capital, employment structure, government spending and transportation capacity as the control variable. And then choose a fixed effects model, using feasible generalized least squares (FGLS) is estimated. The empirical results show that:International trade and the income gap have a significant positive correlation, the FDI and the income gap has a significant negative correlation.