The Empirical Study On The Impact Of FDI On The Income Disparity Of China

In the past several decades, a great deal of FDI flowed into developing countries, from then, Influence caused by a great amount of FDI flowed into developing country has attracted extensive attention of domestic and international scholars. There were two groups of researchers holding totally different points of view on this subject. The core bifurcation is whether the FDI will impact the income distribution of the Amphitryon. The modernization hypothesis argued that FDI will have little specific impact to the Amphitryon economy system by its special origin, but a common sense of investment only. And the unequal phenomenon of income distribution in a country is mostly caused by its specific economic structure and its particular developing period.However, Dependency hypothesis considered that FDI are mainly poured into export oriented area has lead to those related people enjoying much higher income than the average level in the society, then caused huge gap in between to the income distribution. China is one of those countries attracted huge amount of FDI, and as a warning, its GINI coefficient, an index represents one country's wealth disparity, has exceeded the international standard warning line due to its continuously rising in the passing decades.In this case, we tend to believe dependency hypothesis, but what is the truth? We did the regression based on the panel data of the past six years by empirical method. The result is that in general, FDI is not the major reason. The result supports modernization hypothesis as a whole.