Ge Shunqi:The Poverty-Alleviating Effects of Foreign Direct Investment

Date of publication:2016-1-15There have been0A reader to read the article

The Poverty-Alleviating Effects of Foreign Direct Investment: a Microanalysis of Internal Migrants

Abstract    Building a middle-class society is not only a priority for China, but for all countries. FDI can increase demand for labor directly and, through spillover effects and vertical linkages, improve the quality of human capital and wage levels in the country. Based on 2007 data from the census of internal mi- grants in China and the Chinese Industrial Enterprises Database, this paper examines the impact of FDI on the reduction of poverty among migrants. Results suggest that FDI has improved the living standards of residents as well as migrants and has significantly reduced the poverty headcount ratio. Specifically, the poverty headcount ratio is reduced by 0.3%-0.5% if FDI increases by 1%. In addition, FDI that had the most significant effects came from countries that were not tax havens and which sold their products in China.

This paper is published in Journal of International Trade, No.1, 2016.