Multinational enterprises and regional inequality in China

We examine spatial inequality in incomes and in the activities of multinational enterprises (MNE) in China from 1999 to 2013. We consider both interprovincial and urban-rural inequality using improved measurements of both regional average incomes and MNE activities. Although we find some common trends between spatial inequality in incomes and spatial inequality in MNE activities, our analysis of the determinants of urban-rural income inequality finds no evidence that MNEs are to blame for this type of inequality. We find limited evidence that MNEs reduce urban-rural income gaps, but mostly we conclude that they have no significant effect on these gaps.