The Impact Of Foreign Direct Investment On The Income Gap Between Urban And Rural

During the 40 years of reform and opening up,China's economy has developed rapidly.This is an indisputable fact.However,the expansion of the income gap,especially the widening income gap between urban and rural areas,has also attracted more and more attention.The issue of income distribution is a matter of people's livelihood.If it is not handled properly,it will inevitably affect the long-term stability of society and cause social unrest.The biggest feature of reform and opening up is that more and more foreign-funded enterprises enter the Chinese market.Whether it is foreign direct investment or other forms of capital to enter the Chinese market,it is undeniable that these foreign capital inflows have greatly compensated for China's foreign exchange and the early stage of reform and opening up.The lack of financial funds led to the rapid development of coastal cities represented by Shenzhen and Shanghai,increased people's income,improved people's lives,and provided a large number of jobs for a large number of young people returning to their hometowns at that time,but the income gap between residents The expansion of the income gap,especially between urban and rural residents,is particularly evident.Therefore,in recent years,there have been more and more articles on whether FDI inflows will affect the income gap.The research ideas of this paper mainly include the following parts: Firstly,the article reviews the research on the impact of FDI inflow on the income gap of host countries in the past domestic and foreign literatures,and then introduces the development status of China's foreign direct investment and urban-rural income gap,based on Based on Kuznets' s "inverted U-type" hypothesis,the classical growth model is used to analyze the overall impact of FDI on urban-rural income gap.On this basis,the article combines China's specific actual conditions,from population agglomeration,industrial layout,and employment structure.From a different angle,the theory analyzes the mechanism of FDI's effect on urban-rural income gap.Theempirical aspects mainly use the provincial panel data of 31 provinces,municipalities and autonomous regions in China,and use the individual fixed effect model to analyze the impact of foreign direct investment on the urban-rural income gap from the national overall level,and then consider the economic development and foreign investment in the eastern,central and western regions.The difference is the analysis of the impact of FDI inflows in the eastern,central and western regions on the urban-rural income gap in each region.The empirical results show that,from a national perspective,foreign direct investment has narrowed the income inequality between urban and rural residents in China,but it varies from region to region.The inflow of FDI has narrowed the urban-rural income gap between the eastern and central regions;however,FDI has widened the urban-rural income gap in the west.Finally,on the basis of the theoretical and empirical results,the policy recommendations on how to use foreign direct investment to narrow the income gap between urban and rural areas.In terms of attracting foreign investment,we must first formulate and implement an active foreign investment policy.Secondly,we must rationally guide the regional flow of foreign capital and adjust the industrial structure of foreign capital.Finally,we must invest in labor education,improve infrastructure,and facilitate financial information services.Provide an efficient international investment environment for foreign companies.