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The Effect of Foreign Direct Investment Inflows on Income Inequality: Evidence from China

Listed author(s):
  • Mah Jai S.

    ()

    (Division of International Studies, Ewha Womans University, Seodaemun-gu, Seoul, South Korea)

This paper uses data for China during the period 1982–2010 and tests the effect of FDI inflows on income inequality, which is measured by the urban Gini coefficient. A small-sample cointegration test and autoregressive distributed lag bounds test are used as the cointegration tests. According to them, the variables under consideration are not cointegrated. The GMM estimation results show that income inequality worsens with FDI flows into China. The evidence from China shows a non-linear effect of FDI inflows on income inequality.

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File URL: https://www.degruyter.com/view/j/gej.2015.15.issue-4/gej-2015-0045/gej-2015-0045.xml?format=INT
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Article provided by De Gruyter in its journal Global Economy Journal.

Volume (Year): 15 (2015)
Issue (Month): 4 (December)
Pages: 443-453

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Handle: RePEc:bpj:glecon:v:15:y:2015:i:4:p:443-453:n:5
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  1. James B. Ang, 2010. "Does Foreign Aid Promote Growth? Exploring the Role of Financial Liberalization," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 197-212, May.
  2. Appleton, Simon & Song, Lina & Xia, Qingjie, 2014. "Understanding Urban Wage Inequality in China 1988–2008: Evidence from Quantile Analysis," World Development, Elsevier, vol. 62(C), pages 1-13.
  3. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
  4. Chiquiar, Daniel, 2008. "Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico," Journal of International Economics, Elsevier, vol. 74(1), pages 70-93, January.
  5. Pandej Chintrakarn & Dierk Herzer & Peter Nunnenkamp, 2012. "Fdi And Income Inequality: Evidence From A Panel Of U.S. States," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 788-801, 07.
  6. Chen, Zhihong & Ge, Ying & Lai, Huiwen, 2011. "Foreign Direct Investment and Wage Inequality: Evidence from China," World Development, Elsevier, vol. 39(8), pages 1322-1332, August.
  7. Dierk Herzer & Philipp Hühne & Peter Nunnenkamp, 2014. "FDI and Income Inequality—Evidence from Latin American Economies," Review of Development Economics, Wiley Blackwell, vol. 18(4), pages 778-793, November.
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