FDI and Regional Income Disparity in Host Countries: Evidence from China

Yuqing Xing and Kevin Honglin Zhang ()
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Kevin Honglin Zhang: Illinois State University, Department of Economics, Postal: 100 N University St # 142 Normal IL 61761-4402 USA ,, http://www.cob.ilstu.edu/

Economia Internazionale / International Economics, 2004, vol. 57, issue 3, 363-379

Abstract: While foreign direct investment (FDI) might promote income growth, many developing host countries have been concerned about the impact of FDI on regional disparity. Using the Chinese data, we tested how FDI affects income inequality across provinces in the 1990s. The non-parametric analysis based on Spearman Rank Test suggests a positive correlation between FDI stock per capita and inequality. Then an empirical model is specified and estimated with direct measures of regional disparities in income and FDI, along with other determinants. The estimates indicate that the dramatic rise in the regional FDI disparity contributes largely the widening regional income inequality in the 1990s.

Keywords: FDI; Regional Income Inequality; China (search for similar items in EconPapers)
JEL-codes: D30 F23 O53 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (13)

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