Foreign Direct Investment and Unequal Regional Economic Growth in China

= = β₀ + β₁*Y + β₂*Y2 + β₃*Y³ + β₄*Y4 + β₅*Y5

GI = Y00 + Y1O*Y + Y√Y² + y√y³ + Y40*y⁴ + Y√Y⁵

+ (γoι + T11*Y + Y21*Y² + Y30*Y³ + Y40*y⁴ + γ√Y⁵)DY

+ (‰2 + Y12*Y + Y22*Y2 + Y30*Y³ + Y40*Y4 + Y√Y5)DSEZ       (31)

If the neighbor income again is assumed to be the average income DY₂ = o, and
following DY₂² = 0, we have the distribution of growth on income groups described
by a third degree polynomial which gives the final expanded form for attracting more
investments, and the final form for distribution and growth.

If

MGI = Yoo + Yιo*Y + Y20*Y2 + Y30*Y³ + Y40*Y4 + Y50*Y5            (32)

that is the investments for DY₁ = DY₂ = 0.

Then

DGY1 = «00 + («10 - O11DY)GI1

+ β10 («10 - «11DY)(«10 — α11DY2)GI2

- («00 + («10 - d_u*0)MGI

+ β10 (⅜0 - ⅜1*0)(α10 - α_u*0)MGI)                               (33)

Inserting (31) in (26) we have

GY = K00 + K10*Y + K20*Y² + K30*Y³ + K40*Y⁴ + K50*Y⁵

+ ( κ₀₁ + κ₁₁*Y + k₂₁*Y² + κ₃₁*Y³ + k₄₁*Y⁴ + k₅₁*Y⁵)DSEZ

- (( K02 + K12*Y + K22*Y² + K32*Y³ + K42*Y⁴ + K52*Y⁵ )

+ ( κ₀₃ + κ₁₃*Y + k₂₃*Y² + κ₃₃*Y³ + k₄₃*Y⁴ + k₅₃*Y⁵)DSEZ)* DY

+ ( K04 + K14*Y + K24*Y² + K34*Y³ + K44*Y⁴ + K54*Y⁵)DY²         (34)

and

DGY = ( κ₀₁ + κ₁₁*Y + k₂₁*Y² + κ₃₁*Y³ + k₄₁*Y⁴ + κ₅₁*Y⁵)DSEZ

- (( K02 + K12*Y + K22*Y² + K32*Y³ + K42*Y⁴ + K52*Y⁵ )

+ ( κ₀₃ + κ₁₃*Y + κ₂₃*Y² + κ₃₃*Y³ + k₄₃*Y⁴ + κ₅₃*Y⁵)DSEZ)* DY

+ ( K04 + K14*Y + K24*Y² + K34*Y³ + K44*Y⁴ + K54*Y⁵)DY²         (35)

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