Effects Of FDI On China's Wage Gap Between Urban And Rural Areas From The Viewpoint Of Technology Spillovers

Since the reform and opening-up policy in 1979,China had received more and more foreign direct investment(FDI).After several years' development,China become more mature in making use of FDI and FDI plays a more important role in promoting sustainable economic and social development.FDI can not only bring capital but also technology spillovers to host country.Through imitation effect,competition effect,industrial connection effect,labor flow effect and R&D cooperation effect,technology spillovers can affect the technology level of enterprises in host country as well as the quality of the labor force.Meanwhile,China is a country with huge differences between urban areas and rural areas,the income gap between urban and rural areas is one of the demonstration.Currently income from wages is the most important source of residents' income.And the income gap between urban and rural areas mostly lies in the wage gap between them.Many studies show that FDI can affect the wage gap of China through various mechanisms and technology spillovers is one of them.This paper will examine how FDI's technology spillovers affect the wage gap between urban and rural areas,using qualitative and quantitative methods as well as normative and empirical methods to analyze the way of technology spillovers happen,its transmission channels,absorptive capacity factors and the mechanism of affecting wage gap between urban and rural areas,etc.This paper makes use of Chinese provincial panel data from 2000 to 2014,constructing a multivariate regression model to analyze how FDI's technology spillovers affect the wage gap between urban and rural areas.The empirical results show that FDI's technology spillovers can narrow the wage gap between urban and rural areas of our country.Besides,human capital and R&D stock are two important absorptive capacity factors of FDI's technology spillovers.After the absorption of them,FDI's technology spillovers can widen the income gap between urban and rural areas.The empirical results of four economic regions are more complex.The effect of FDI's technology spillovers on wage gap between urban and rural areas is only significant in the western region and northeast region.However,after the absorption of R&D stock,the effect of FDI's technology spillovers on wage gap between urban and rural areas becomes significant in all regions.This proves the importance of R&D stock.In addition,this paper adds some other economic factors into the empirical models.But the significance,directions and degree of the effects of these factors on wage gap between urban and rural areas are different mostly due to the differences among regional economic development.In the end of this paper,based on the analytical results,several policy proposals will be put forward.