The Influence Of FDI On The Income Distribution Of Urban And Rural Residents

Under the background of increasingly active international capital flows,China has actively introduced foreign investment since its reform and opening up,and the scale of FDI continues to expand.Shandong Province,as a major economic province of our country,has continuously increased the total amount of FDI in Shandong Province.However,overall,the development of various regions in Shandong Province is uneven,and the economic strength of the eastern coastal areas has been far ahead of the Western and central areas.Eastern coastal areas have natural advantages in the introduction of foreign investment,local residents will benefit more from the introduction of foreign investment,which makes the gap in income distribution further widened in the province.Therefore,it is particularly urgent to study FDI and income distribution in Shandong Province and put forward corresponding policy recommendations accordingly.This article mainly carried out four parts of the study.First of all,this paper sorts out the domestic and foreign theoretical research on FDI and income distribution.Secondly,this paper describes statistically the development status of FDI in Shandong Province and the status of income distribution in Shandong Province.In the third part,this paper empirically examines whether there is a significant relationship between FDI and the income disparity between urban and rural residents in Shandong Province.Cointegration tests and ADF tests are also performed.Then GMM panel regression method is used for empirical research.On the one hand,this paper studies the impact of the income distribution gap in FDI provinces from the overall level of Shandong Province;on the other hand,this paper divides Shandong Province into three major regions:eastern coastal areas,western and southern regions,central and south areas.Then,this paper studies the impact of FDI on income distribution within each region.Finally,based on the comprehensive theoretical analysis and empirical conclusions,this paper gives relevant policy recommendations based on the specific conditions of Shandong Province.The conclusions of this paper mainly include the following points.Firstly,the analysis of the development status of Shandong's FDI shows that foreign investors'investment in Shandong Province is mainly concentrated in the secondary and tertiary industries.In recent years,the investment direction of FDI has gradually shifted to the tertiary industry.FDI in Shandong Province has shown a total "West-low" trend;foreign capital attracted by Shandong Province mainly comes from Hong Kong and South Korea.At the same time,the analysis of the characteristics of urban-rural income inequality shows that the income of urban and rural residents has steadily increased.At the same time,the income disparity between urban and rural residents in the whole province and the three major regions in Shandong province has generally expanded.Secondly,according to the dynamic panel data analysis of Shandong Province,the use of FDI in Shandong Province has aggravated the uneven distribution of urban and rural income,and the indirect effects are mainly achieved through the change of employment structure and industrial structure.The analysis of panel data models in the three regions respectively shows that the conclusions are quite different.Overall,the income gap between regions in Shandong Province has been expanded due to the introduction of FDI.However,income distribution will be more even due to the introduction of FDI within the region.From the perspective of the transmission mechanism,with the increase in the proportion of people engaged in secondary and tertiary industries,the income disparity between urban and rural areas in the central and southern regions and the northwest region has increased;FDI investment in the secondary and tertiary industries has intensified income in the eastern coastal areas,and reduced the income gap in central and south areas.In addition,FDI has intensified the imbalance of income distribution between urban and rural areas in the eastern coastal areas through the expansion of trade import and export,but it has narrowed the income gap in central and south areas.In addition,it can be seen from the dummy variable that FDI has a tendency to increase the income gap in the eastern coastal areas before 2006,while the central and south areas shows the opposite characteristics.This study helps to analyze the phenomenon of inequality in FDI and income distribution among various regions within Shandong Province,and it can also provide a good reference for similar studies in other provinces or regions.