Effective Factor Endowments, Trade Openness and Income Distribution in China

Xiaodong Lu () and Guowei Cai ()
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Xiaodong Lu: Lingnan College, Sun Yat-sen University, Guangzhou 510275, China
Guowei Cai: Lingnan College, Sun Yat-sen University, Guangzhou 510275, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2011, vol. 6, issue 2, 188-210

Abstract: This paper studies the empirical relationship among factor endowment, trade openness and individual income distribution. Using panel data, we show that factor endowment characters, to some extent, explains income gap in China. First, land and Capital intensive provinces have a more equal income distribution while human capital and labor-intensive provinces have a less equal income distribution. Second, Trade openness has a significant effect on China¡¯s income distribution; the interaction between a special endowment and openness has different effect on income distribution; we also show that FDI, economy development, unemployment and reform have considerable negative effect on income distribution. Our results are robust to various kinds of test.

Keywords: income distribution; factor endowments; trade openness (search for similar items in EconPapers)
JEL-codes: D3 F15 F2 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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