Title: Financial Development,Foreign Direct Investment and Urban-rural Income Disparity:An Threshold Model Analysis Based on the Inter-province Panel Data in China
Abstract: This paper builds a Threshold Model to explore the relation between the foreign direct investment and the urban-rural income disparity based on panel data of 29 provincial units from 1993 to 2009,using the panel threshold model proposed by Hansen.The results show that there is double threshold effects that the foreign direct investment has on the urban-rural income disparity, based on the financial development;that the urban-rural income disparity of eastern provinces is relatively small because of the high financial development level and the abundant FDI,which is opposite in western provinces;and that the middle provinces fall in between.In the case of controlling education development, the urban-rural employ structure and the local government's fiscal expenditure,the enhancement in the financial development can extend the urban-rural income disparity.Finally some suggestions are given on how to reduce the urban-rural income disparity.
Publication Year: 2011
Publication Date: 2011-01-01
Language: en
Type: article
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Cited By Count: 2
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