Foreign direct investment and China's regional income inequality

Kang, Yu; Xin, Xian; Guo, Ping; Liu, Xiaoyun

doi:10.1016/j.econmod.2011.02.026

Cited by 38 publications

(23 citation statements)

References 17 publications

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“…Initially, FDI into China was based on comparative advantage in labour-intensive production across the coastal region due to the region's large amount of unskilled labour and lower cost of production. However, the differences in regional distribution of foreign direct investment have also contributed to the increased wage disparity across regions (Yu, et al, 2011). Data indicates that the average wage level across the coastal region is higher than all three non-coastal regions.…”

Section: Determining Factors Of Fdi In Manufacturing Industry Across mentioning

confidence: 99%

Regional Determinants of Foreign Direct Investment in Manufacturing Industry

Liu¹,

Daly²,

Varua³

2012

IJEF

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Since China opened its economy to foreign investment in 1979, it has become the second largest Foreign Direct Investment (FDI) destination in the world after the USA. Over the past three decades, the manufacturing sector has dominated China's FDI inflow, however, when manufacturing activity is bifurcated into low and high technology classes, it becomes evident that China is in a transition stage, moving from FDI in traditional low-tech manufacturing activity to a high-tech manufacturing environment. This paper attempts to analyse the key determinants of FDI inflow across low and high technology manufacturing industry across the four geographical regions of China. In the paper we empirically investigate the determinants of FDI inflows to both high and low-tech manufacturing industries by market size, labor cost, labor quality, and government spending on human capita.

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Section: Determining Factors Of Fdi In Manufacturing Industry Across mentioning

confidence: 99%

Regional Determinants of Foreign Direct Investment in Manufacturing Industry

Liu¹,

Daly²,

Varua³

2012

IJEF

View full text Add to dashboard Cite

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“…Besides, FDI is found to be positively correlated with regional inequality (Sun and Chai 1998;Fujita and Hu 2001;Sun and Parikh 2001;Ng and Leung 2002;Zhang and Zhang 2003;Fu 2004;Nissanke and Thorbecke 2006;Ran, Voon, and Li 2007;Tsui 2007;Wan 2007;Wan, Lu, and Chen 2007;Wan 2008;Wei, Yao, and Liu 2009;Li and Wei 2010;Tian et al 2011). Wan, Lu, and Chen (2007) suggest that globalization is the most important determinant of regional inequality; however, a few studies argue that globalization exerts no, little, or even negative effect on inequality (Wei and Wu 2001;Cai, Chen, and Zhou 2010;Chen and Groenewold 2010;Yu et al 2011;Mah 2016).…”

Section: Globalizationmentioning

confidence: 99%

The Impacts of Financial Development, Urbanization, and Globalization on Income Inequality: A Regression-based Decomposition Approach

Lee

Cheong

et al. 2019

Asian Economic Papers

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This paper investigates the impacts of financial development, urbanization, and globalization on income inequality in China by applying a regression-based inequality decomposition approach to panel data on Chinese provinces. Provincial data on urbanization and globalization are combined with new data collected from a unique database of financial development in China compiled at the county level. Our findings suggest that financial development, urbanization, and globalization have a positive impact on income. However, our inequality decomposition suggests that financial development may be particularly important for promoting inclusive growth, since financial development not only stimulates economic growth but is also found to be a factor that reduces inequality.

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Section: Globalizationmentioning

confidence: 99%

The Impacts of Financial Development, Urbanization, and Globalization on Income Inequality: A Regression-Based Decomposition Approach

Lee

Cheong

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building, 8th Floor 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractThis paper aims to study the impacts of financial development, urbanization, and globalization on income inequality in the People's Republic of China. It applies the regression-based inequality decomposition approach on a panel dataset, which is aggregated from a unique database of financial development so as to quantify the relative contributions of these three factors, along with other variables such as physical capital and human capital, to income inequality. The findings suggest that financial development, urbanization, and globalization exert a positive impact on income. However, the contributions of urbanization, foreign investment, physical capital, and human capital to regional inequality are positive. Moreover, it is found that financial development is crucial for promoting inclusive growth, since it can stimulate economic growth and is found to be an equalizing factor of inequality.

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Foreign direct investment and China's regional income inequality

Cited by 38 publications

References 17 publications

Regional Determinants of Foreign Direct Investment in Manufacturing Industry

Regional Determinants of Foreign Direct Investment in Manufacturing Industry

The Impacts of Financial Development, Urbanization, and Globalization on Income Inequality: A Regression-based Decomposition Approach

The Impacts of Financial Development, Urbanization, and Globalization on Income Inequality: A Regression-Based Decomposition Approach

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