IDEAS home Printed from https://ideas.repec.org/a/eee/asieco/v48y2017icp120-133.html
   My bibliography  Save this article

Multinational enterprises and regional inequality in China

Author

Listed:
  • Greaney, Theresa M.
  • Li, Yao

Abstract

We examine spatial inequality in incomes and in the activities of multinational enterprises (MNE) in China from 1999 to 2013. We consider both interprovincial and urban-rural inequality using improved measurements of both regional average incomes and MNE activities. Although we find some common trends between spatial inequality in incomes and spatial inequality in MNE activities, our analysis of the determinants of urban-rural income inequality finds no evidence that MNEs are to blame for this type of inequality. We find limited evidence that MNEs reduce urban-rural income gaps, but mostly we conclude that they have no significant effect on these gaps.

Suggested Citation

  • Greaney, Theresa M. & Li, Yao, 2017. "Multinational enterprises and regional inequality in China," Journal of Asian Economics, Elsevier, vol. 48(C), pages 120-133.
    • Handle: RePEc:eee:asieco:v:48:y:2017:i:c:p:120-133
    DOI: 10.1016/j.asieco.2016.09.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S104900781630118X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.asieco.2016.09.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wei, Shang-Jin & Wu, Yi, 2001. "Globalization and Inequality: Evidence from within China," CEPR Discussion Papers 3088, C.E.P.R. Discussion Papers.
    2. Fleisher, Belton & Li, Haizheng & Zhao, Min Qiang, 2010. "Human capital, economic growth, and regional inequality in China," Journal of Development Economics, Elsevier, vol. 92(2), pages 215-231, July.
    3. Guanghua Wan & Ming Lu & Zhao Chen, 2007. "Globalization And Regional Income Inequality: Empirical Evidence From Within China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 35-59, March.
    4. Li, Chao & Gibson, John, 2013. "Rising Regional Inequality in China: Fact or Artifact?," World Development, Elsevier, vol. 47(C), pages 16-29.
    5. Lessmann, Christian, 2013. "Foreign direct investment and regional inequality: A panel data analysis," China Economic Review, Elsevier, vol. 24(C), pages 129-149.
    6. Terry Sicular & Yue Ximing & Björn Gustafsson & Li Shi, 2007. "The Urban–Rural Income Gap And Inequality In China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 93-126, March.
    7. Jennifer P. Poole, 2013. "Knowledge Transfers from Multinational to Domestic Firms: Evidence from Worker Mobility," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 393-406, May.
    8. Kailei Wei & Shujie Yao & Aying Liu, 2009. "Foreign Direct Investment and Regional Inequality in China," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 778-791, November.
    9. Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, February.
    10. Sonali Jain-Chandra & Tidiane Kinda & Kalpana Kochhar & Shi Piao & Johanna Schauer, 2019. "Sharing the Growth Dividend: Analysis of Inequality in Asia," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(12), pages 5-28, September.
    11. Theresa M. Greaney & Yao Li, 2017. "Examining Determinants of Foreign Wage Premiums in China," The World Economy, Wiley Blackwell, vol. 40(10), pages 2056-2077, October.
    12. Lipsey, Robert E. & Sjoholm, Fredrik, 2004. "Foreign direct investment, education and wages in Indonesian manufacturing," Journal of Development Economics, Elsevier, vol. 73(1), pages 415-422, February.
    13. Yu, Kang & Xin, Xian & Guo, Ping & Liu, Xiaoyun, 2011. "Foreign direct investment and China's regional income inequality," Economic Modelling, Elsevier, vol. 28(3), pages 1348-1353, May.
    14. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    15. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
    16. Kai‐yuen Tsui, 2007. "Forces Shaping China'S Interprovincial Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 60-92, March.
    17. Gregory Chow, 2006. "Are Chinese Official Statistics Reliable?," CESifo Economic Studies, CESifo, vol. 52(2), pages 396-414, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Hao & Fidrmuc, Jan & Luo, Qi, 2021. "A spatial analysis of inward FDI and urban–rural wage inequality in China," Economic Systems, Elsevier, vol. 45(3).
    2. Wen, Huwei & Chen, Wenjing & Zhou, Fengxiu, 2023. "Does digital service trade boost technological innovation?: International evidence," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    2. Wai Choi Lee & Tsun Se Cheong & Yanrui Wu & Jianxin Wu, 2019. "The Impacts of Financial Development, Urbanization, and Globalization on Income Inequality: A Regression-based Decomposition Approach," Asian Economic Papers, MIT Press, vol. 18(2), pages 126-141, Summer.
    3. Jing Li & Tsun Se Cheong & Jianfa Shen & Dahai Fu, 2019. "Urbanization And Rural–Urban Consumption Disparity: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 983-996, September.
    4. Peng Bin & Andrea Fracasso, 2017. "Regional Consumption Inequality in China: An Oaxaca-Blinder Decomposition at the Prefectural Level," Growth and Change, Wiley Blackwell, vol. 48(3), pages 459-486, September.
    5. Wang, Hao & Fidrmuc, Jan & Luo, Qi, 2021. "A spatial analysis of inward FDI and urban–rural wage inequality in China," Economic Systems, Elsevier, vol. 45(3).
    6. Guangdong Li & Chuanglin Fang, 2014. "Analyzing the multi-mechanism of regional inequality in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 155-182, January.
    7. Farhad Noorbakhsh & Zhikai Wang, 2010. "Interprovincial disparities in China since the reforms: convergence or divergence?," Working Papers 2010_11, Business School - Economics, University of Glasgow.
    8. Jeffrey Zax, 2016. "Provincial valuations of human capital in urban China, inter-regional inequality and the implicit value of a Guangdong hukou," ERSA conference papers ersa16p693, European Regional Science Association.
    9. Hrushikesh Mallick & Mantu Kumar Mahalik & Hemachandra Padhan, 2020. "Does globalization exacerbate income inequality in two largest emerging economies? The role of FDI and remittances inflows," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(4), pages 443-480, December.
    10. Lessmann, Christian, 2014. "Spatial inequality and development — Is there an inverted-U relationship?," Journal of Development Economics, Elsevier, vol. 106(C), pages 35-51.
    11. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2021. "The great Chinese inequality turnaround," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 467-482.
    12. Iris Claus & Les Oxley & Chen Wang & Guanghua Wan & Dan Yang, 2014. "Income Inequality In The People'S Republic Of China: Trends, Determinants, And Proposed Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 686-708, September.
    13. Li, Chao & Gibson, John, 2013. "Rising Regional Inequality in China: Fact or Artifact?," World Development, Elsevier, vol. 47(C), pages 16-29.
    14. Anders C. Johansson & Dan Liu, 2020. "Foreign direct investment and inequality: Evidence from China's policy change," The World Economy, Wiley Blackwell, vol. 43(6), pages 1647-1664, June.
    15. Christopher Candelaria & Mary C. Daly & Galina Hale, 2009. "Beyond Kuznets: persistent regional inequality in China," Working Paper Series 2009-07, Federal Reserve Bank of San Francisco.
    16. Yuwan Duan & Erik Dietzenbacher & Bart Los & Ruochen Dai, 2023. "Regional inequality in China during its rise as a giant exporter: A value chain analysis," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 148-172, January.
    17. GOH, Chor-ching & LUO, Xubei & ZHU, Nong, 2009. "Income growth, inequality and poverty reduction: A case study of eight provinces in China," China Economic Review, Elsevier, vol. 20(3), pages 485-496, September.
    18. John Knight, 2014. "Inequality in China: An Overview," The World Bank Research Observer, World Bank, vol. 29(1), pages 1-19.
    19. Euijune Kim & Yasir Niti Samudro, 2017. "The impact of intergovernmental transfer funds on interregional income disparity in Indonesia," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 21(1), pages 22-40, January.
    20. Shi, X., 2018. "Inequality of Opportunity in Earnings in Rural China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277016, International Association of Agricultural Economists.

    More about this item

    Keywords

    Spatial inequality; Urban-rural inequality; China; Foreign direct investment;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:48:y:2017:i:c:p:120-133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/asieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.