| This paper explores the effects of the dual opening up on the income disparity of an economy.Based on a prudent review through the existing researches,a set of preliminary mechanisms where upon built the theoretical model is drawn to illustrate the effects of inter-regional and international opening up on the intraregional income disparity,respectively.Then two comprehensive indexes are formed to measure the level of inter-regional and international opening and are used in the empirical analysis where a significant correlation is found between them and the Gini coefficient which is adopted to measure the level of income inequality.The main conclusion got from the theoretical model is based on the regional factor endowment,which is pointed to the relative affluence of labor to capital.When the country is labor abundant,improving the level of opening up to the domestic areas will increase the return on capital,and then expand the intraregional income inequality.On the contrary,improving the level of opening up to the foreign world will reduce the return on capital,and then reduce the intraregional income inequality.When the country is capital abundant,the opposite is true.In the empirical analysis,the effect of dual opening up on the intraregional income inequality is estimated through OLS,fixed effect and random effect regression according to the province-level data from 1995 to 2015 in China.The results show that,for all provinces,both the inter-regional opening up and international opening up are conductive to reduce the income inequality between urban and rural residents and Gini coefficient.The interaction term of international and inter-regional opening up is significantly positive,which means that there is a significant substitution effect between this two kinds of integration.After controlling the spatial correlation,the interaction term of international and inter-regional opening up is significantly negative,so the two variables had significant complementary effects.For the income gap between urban and rural residents,the above conclusion is still robust of the eastern,certain and western provinces.For the Gini coefficient,the interaction term is robust too.While the inter-regional opening up increases the income inequality for the eastern and the western provinces,the international opening up decreases the income gap for the western provinces.There is no significant relationship between the dual opening up and the regional Gini coefficient for the central provinces.In a conclusion,both the theoretical model and the empirical measurement show that improving the level of dual opening up is beneficial to reduce the income inequality of the residents.Moreover,there is a certain substitution effect between the inter-regional opening up and the international opening up. |
