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Effective Factor Endowments, Trade Openness and Income Distribution in China

Author

Listed:
  • Xiaodong Lu

    () (Lingnan College, Sun Yat-sen University, Guangzhou 510275, China)

  • Guowei Cai

    () (Lingnan College, Sun Yat-sen University, Guangzhou 510275, China)

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.

Suggested Citation

  • Xiaodong Lu & Guowei Cai, 2011. "Effective Factor Endowments, Trade Openness and Income Distribution in China," Frontiers of Economics in China, Higher Education Press, vol. 6(2), pages 188-210, June.
  • Handle: RePEc:fec:journl:v:6:y:2011:i:2:p:188-210
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-011-0128-2
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    Cited by:

    1. Bukhari, Mahnoor & Munir, Kashif, 2016. "Impact of Globalization on Income Inequality in Selected Asian Countries," MPRA Paper 74248, University Library of Munich, Germany.

    More about this item

    Keywords

    income distribution; factor endowments ; trade openness;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F15 - International Economics - - Trade - - - Economic Integration
    • D3 - Microeconomics - - Distribution

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