Arbeitspapier
A Spatial Analysis of Inward FDI and Rural-Urban Wage Inequality: Evidence from China
When investigating the relationship between inward FDI and rural-urban inequality, previous studies overlook the inter-regional interactions. Building on the literature that highlights the significant role of rural-urban migration in inequality, this article investigates spatial spillover effect of inward FDI on the rural-urban wage inequality by utilizing the Spatial Durbin Model (SDM) both in the short run and long run. In particular, we carefully consider the heterogeneity of inward FDI and categorize it with respect to entry modes and sectoral distribution. On the basis of a panel dataset covering 30 provinces in China from 2000 to 2016, our results show that overall the inward FDI should not be blamed for the exacerbation of rural-urban wage inequality. We do not find significant relationship between inward FDI in secondary and tertiary sector while the FDI in primary sector has a slight negative effect. When we separate the FDI according to entry modes, we find that WFE is shown to have a negative effect on the rural-urban wage inequality and this effect is more pronounced in the long run when we conduct a period average estimation. This change also similarly applies to the equity joint ventures.
- Language
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Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 8258
- Classification
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Wirtschaft
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
International Investment; Long-term Capital Movements
International Linkages to Development; Role of International Organizations
- Subject
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spatial spillovers
foreign direct investment
rural-urban wage inequality
SDM
- Event
-
Geistige Schöpfung
- (who)
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Wang, Hao
Fidrmuc, Jan
Luo, Qi
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2020
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Wang, Hao
- Fidrmuc, Jan
- Luo, Qi
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2020
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