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Journal articles on the topic 'Trade flows and income inequality'
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Huang, Ziyi, Wenguo He, and Yue Chen. "Study on the Impact of Cross-border Capital Flows on Income Inequality." Frontiers in Business, Economics and Management 3, no. 3 (April 18, 2022): 18–23. http://dx.doi.org/10.54097/fbem.v3i3.299.
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The impact of economic globalization on income inequality has always been the focus of development economics research. The process of globalization in the past few decades shows that economic globalization is mainly the globalization of commodity trade and the globalization of capital flow. This paper mainly studies the impact of cross-border capital flows on income inequality, using cross-border panel data from 109 countries or regions from 1973 to 2015, and using the systematic GMM method to study the impact of cross-border capital flows on income inequality under different financial depths, and finally put forward policy recommendations to improve income inequality.
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MAHLER, VINCENT A., DAVID K. JESUIT, and DOUGLAS D. ROSCOE. "Exploring the Impact of Trade and Investment on Income Inequality." Comparative Political Studies 32, no. 3 (May 1999): 363–95. http://dx.doi.org/10.1177/0010414099032003004.
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This article explores the relationship between international integration and domestic inequality in the developed countries in the mid-1980s and early 1990s. The analysis examines two major modes of integration, trade and direct investment, disaggregating each by economic sector and distinguishing between imports and exports, and inbound and outbound flows and stocks. In measuring income inequality, extensive use is made of micro-data sets that have recently become available through the Luxembourg Income Study (LIS), which provides much more detailed and comparable data on income inequality than has heretofore been the case. In particular, LIS data can be aggregated at the level of economic sector, and permit the comparison of pre- and post-government income. The study finds few significant relationships between either trade or investment and sectoral income distribution. The overall conclusion is that economic globalization is not a critically important factor in explaining recent trends in income inequality in the Western world.
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Bayraktar Saglam, Bahar. "“Empty Plates”: Impacts of Food Prices, Inequality and Trade on Malnutrition." Revista de Economía Mundial, no. 63 (April 21, 2023): 21–43. http://dx.doi.org/10.33776/rem.vi63.6949.
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This paper studies the complex link between nutritional status and income by using panel data from 150 countries over the period 1960–2018 and employing a panel VAR approach under system GMM estimates. The causal link between nutrition intake and income may change from one income group to another due to different effects of similar factors. While hikes in food prices, unfair distributions of income and rising international trade flows lower nutrition intake in lower middle-income countries, the same factors lead to higher body weights in upper middle-income and high-income OECD countries. Therefore, Engel Curve and Efficiency Wage Hypotheses fail for a group of countries.
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Kovak, Brian K., and Peter M. Morrow. "Distributional Impacts of the Canada-US Free Trade Agreement." AEA Papers and Proceedings 113 (May 1, 2023): 585–89. http://dx.doi.org/10.1257/pandp.20231078.
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We examine the effects of the 1988 Canada-US Free Trade Agreement (FTA) on employment and earnings inequality among low-, medium-, and high-income Canadian workers initially employed in manufacturing. Although the FTA tariff cuts drove large changes in trade flows, we find generally small effects on employment and cumulative earnings during 1989-2004. Workers faced negative effects of import competition and positive effects of access to the US export market, but these effects were largely offset by transitions into other industries and sectors. The effect on earnings inequality was small, with point estimates implying a slight reduction in earnings inequality.
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Chen, Chunlai. "The impact of foreign direct investment on urban-rural income inequality." China Agricultural Economic Review 8, no. 3 (September 5, 2016): 480–97. http://dx.doi.org/10.1108/caer-09-2015-0124.
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Purpose The purpose of this paper is to analyse the impact of foreign direct investment (FDI) on urban-rural income inequality in China. Design/methodology/approach This study uses the provincial-level panel data and employs the fixed-effects instrumental variable regression technique to investigate empirically the impact of FDI on urban-rural income inequality in China. Findings The study finds that while FDI has directly contributed to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, FDI has also contributed to increasing urban-rural income inequality through international trade. Practical implications The study has some policy implications. First, as the study finds that FDI not only contributes to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, but also contributes to increasing urban-rural income inequality through international trade, therefore, apart from improving local economic and technological conditions to attract more FDI inflows, China should re-design FDI policies by shifting away from encouraging export-oriented FDI to encouraging FDI flows into the industries and sectors in line with China’s overall economic structural adjustments and industrial upgrading. Second, policies should focus on increasing investment in infrastructure development and in public education, which not only can reduce urban-rural income inequality but also can attract more FDI inflows. And finally policies should be designed to accelerate urbanisation development by focusing on urban-rural integrated development, household registration system reform and proper settlement of rural migrants in urban areas, thus reducing urban-rural income inequality. Originality/value The paper makes two major contributions to the literature. First, the paper adopts the fixed-effects instrumental variable regression technique to deal with the endogeneity issues in estimating the impact of FDI on urban-rural income inequality, producing more consistent estimates. Second, the paper investigates not only the direct impact of FDI on urban-rural income inequality through the effects of employment creation, knowledge spillovers and contribution to economic growth, but also the indirect impact of FDI on urban-rural income inequality through its activities in international trade, adding new empirical evidence to the sparse literature on the impact of FDI on income inequality in China.
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Mahler, Vincent A. "Economic Globalization, Domestic Politics, and Income Inequality in the Developed Countries." Comparative Political Studies 37, no. 9 (November 2004): 1025–53. http://dx.doi.org/10.1177/0010414004268849.
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This article assesses the impact of economic globalization and domestic political factors on income inequality and state redistribution in the developed countries over the past two decades, using household-level data from the Luxembourg Income Study that are more detailed, accurate, and cross-nationally comparable than those used in previous empirical work. It examines three major modes of international integration—trade, direct foreign investment, and international financial flows—as well as four domestic political variables—the partisan balance of national cabinets, electoral turnout, union density, and the centralization of wage-setting institutions. The study finds only scattered relationships between global integration and income distribution or redistribution but reasonably strong positive relationships between several domestic political variables and an egalitarian distribution of income and/or extensive state redistribution. These findings are consistent with a growing number of studies that emphasize the resilience of domestic political factors in the face of economic globalization.
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Coşar, A. Kerem, Nezih Guner, and James Tybout. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy." American Economic Review 106, no. 3 (March 1, 2016): 625–63. http://dx.doi.org/10.1257/aer.20110457.
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This paper explores the combined effects of reductions in trade frictions, tariffs, and firing costs on firm dynamics, job turnover, and wage distributions. It uses establishment-level data from Colombia to estimate an open economy dynamic model that links trade to job flows and wages. Counterfactual experiments imply that Colombia's integration with global product markets increased its national income at the expense of higher unemployment, greater wage inequality, and increased firm-level volatility. In contrast, contemporaneous labor market reforms dampened the increase in unemployment and aggregate job turnover. The results speak more generally to the effects of globalization on labor markets. (JEL F13, F16, F66, J31, J63, O15, O19)
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Starr, Jared, Craig Nicolson, Michael Ash, Ezra M. Markowitz, and Daniel Moran. "Income-based U.S. household carbon footprints (1990–2019) offer new insights on emissions inequality and climate finance." PLOS Climate 2, no. 8 (August 17, 2023): e0000190. http://dx.doi.org/10.1371/journal.pclm.0000190.
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Current policies to reduce greenhouse gas (GHG) emissions and increase adaptation and mitigation funding are insufficient to limit global temperature rise to 1.5°C. It is clear that further action is needed to avoid the worst impacts of climate change and achieve a just climate future. Here, we offer a new perspective on emissions responsibility and climate finance by conducting an environmentally extended input output analysis that links 30 years (1990–2019) of United States (U.S.) household-level income data to the emissions generated in creating that income. To do this we draw on over 2.8 billion inter-sectoral transfers from the Eora MRIO database to calculate both supplier- and producer-based GHG emissions intensities and connect these with detailed income and demographic data for over 5 million U.S. individuals in the IPUMS Current Population Survey. We find significant and growing emissions inequality that cuts across economic and racial lines. In 2019, fully 40% of total U.S. emissions were associated with income flows to the highest earning 10% of households. Among the highest earning 1% of households (whose income is linked to 15–17% of national emissions) investment holdings account for 38–43% of their emissions. Even when allowing for a considerable range of investment strategies, passive income accruing to this group is a major factor shaping the U.S. emissions distribution. Results suggest an alternative income or shareholder-based carbon tax, focused on investments, may have equity advantages over traditional consumer-facing cap-and-trade or carbon tax options and be a useful policy tool to encourage decarbonization while raising revenue for climate finance.
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Rodriguez-Fernandez, Rodrigo, Margarida Siopa, Sarah J. Simpson, Rachel M. Amiya, Joao Breda, and Francesco P. Cappuccio. "Review ArticleCurrent salt reduction policies across gradients of inequality-adjusted human development in the WHO European region: minding the gaps." Public Health Nutrition 17, no. 8 (August 8, 2013): 1894–904. http://dx.doi.org/10.1017/s136898001300195x.
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AbstractObjectiveTo assess current salt† reduction policies in countries of the WHO European Region against the backdrop of varying levels of human development adjusted for income, education and health (longevity) inequalities.DesignPopulation-based, cross-sectional study, with data gathered through systematic review of relevant databases and supplementary information provided by WHO Nutrition Counterparts.SettingMember States of the WHO European Region.SubjectsInequality-adjusted Human Development Index scores were analysed against assessed levels of development and implementation of national nutrition policies and initiatives targeting population-level salt reduction.ResultsWithin the WHO European Region, Inequality-adjusted Human Development Index values among countries with no existing salt reduction initiatives (mean 0·643 (se 0·022)) were significantly lower than among those with either partially implemented/planned salt initiatives (mean 0·766 (se 0·017), P < 0·001) or fully implemented salt initiatives (mean 0·780 (se 0·021), P < 0·001).ConclusionsWhere salt reduction strategies are implemented as an integral part of national policy, outcomes have been promising. However, low- and middle-income countries may face severe resource constraints that keep them from emulating more comprehensive strategies pursued in high-income countries. Care must be taken to ensure that gaps are not inadvertently widened by monitoring differential policy impacts of salt policies, particularly regarding trade flows.
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Williamson, Jeffrey G. "Demographic Dividends Revisited." Asian Development Review 30, no. 2 (September 2013): 1–25. http://dx.doi.org/10.1162/adev_a_00013.
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This paper revisits demographic dividend issues after almost 2 decades of debate. In 1998, David Bloom and I used a convergence model to estimate the impact of demographic-transition-driven age structure effects and calculated what the literature has come to call the “demographic dividend.” These early estimates seem to be similar to those coming from more recent overlapping generation models, when properly estimated. Research has shown that the demographic dividend is not simply a labor participation rate effect, but also a growth effect. Life-cycle savings, investment deepening, foreign capital flows, and schooling have all been greatly affected by the demographic transition. The paper discusses just how much of these positive growth effects are based on accelerating human capital accumulation induced by demand-side quality–quantity trade-offs versus a co-movement between demographic transitions and public schooling supply-side expansions. Since emigration has been driven in part by demography, it has wasted some of the demographic dividend by brain drain. In addition, within-country rural–urban migrations have also been driven in part by demographic transitions with different spatial timing. Finally, the paper shows how lifetime—not just annual—income inequality has been influenced by demographic transitions.
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Wood, Adrian. "Income Inequality and Trade." Brookings Review 14, no. 3 (1996): 48. http://dx.doi.org/10.2307/20080671.
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Furusawa, Taiji, Hideo Konishi, and Duong Lam Anh Tran. "International Trade and Income Inequality*." Scandinavian Journal of Economics 122, no. 3 (October 28, 2019): 993–1026. http://dx.doi.org/10.1111/sjoe.12360.
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Reskiyah, Emy Sri. "International Trade and Inequality: A Comparative Study Between Czech Republic and Poland." Jurnal Ilmiah Hubungan Internasional 19, no. 1 (June 19, 2023): 39–59. http://dx.doi.org/10.26593/jihi.v19i1.6116.39-59.
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Income inequality as one of the dimensions of economic inequality has been a serious social problem both in developed and developing countries. It also attracts attention both in popular and academic writing and in public debates. One of the arguments shows that trade liberalisation is linked to an increase in income inequality in high-income countries, and reduces inequality in low-income countries. The Czech Republic and Poland, as among the high-income countries, have not seen rising levels of income inequality during the financial crisis in 2008-2009 and are also among the lowest levels of income inequality. This research uses the theory of international trade and the concept of income inequality as an analytical tool. The objective of this research is to examine the reason for why both countries have not seen rising in their level of income inequality during the financial crisis in 2008-2009 and to further investigate the relations between international trade and level of income inequality by using comparative analysis and the quantitative methods of descriptive statistical analysis. This paper shows that besides a decrease in trade turnover that leads to a lower level of income inequality when it is measured by Gini Coefficient, the macroeconomic policies also play crucial part in low level of income inequality in the Czech Republic and Poland. Keywords: International Trade; Income Inequality; Poland; Czech Republic; Gini Coefficient
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Sattar, Rashid, and Rana Ejaz Ali Khan. "Troika of Trade Openness, Poverty and Income Inequality: Empirical Evidence from Lower and Middle Income Countries." Review of Economics and Development Studies 7, no. 2 (June 20, 2021): 243–56. http://dx.doi.org/10.47067/reads.v7i2.355.
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The current study investigates the relationship among trade openness, poverty and income inequality in the developing economies classified as lower and middle income countries. Kao and Fisher cointegration tests are employed to see the long-run equilibrium relationship among the variables. Panel cointegration regression is employed to calculate the magnitude of variables through FMOLS and DOLS techniques. The results demonstrate that interaction of these three variables differ for income groups of countries, however, trade openness and poverty increase income inequality in both groups. Similarly, income inequality decreases trade openness in both lower income and middle income groups of the economies. Trade openness increases poverty in lower income countries only. Poverty increases income inequality in lower income countries but in middle income countries it decreases trade openness. In the control variables the financial development has shown encouraging effect on trade openness in lower and middle income countries. GDP growth has shown positive impact on income inequality in lower income countries but negative impact in middle income countries. As trade openness has discoursing effect so the economies should carefully deal with the implications through proper policy framework.
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Ali, Adeel, Syed Faizan Iftikhar, Ambreen Fatima, and Lubna Naz. "Income Inequality, Redistribution of Income and Trade Openness." Pakistan Development Review 54, no. 4I-II (December 1, 2015): 865–74. http://dx.doi.org/10.30541/v54i4i-iipp.865-874.
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Literature on nexus between trade openness and government spending is impressive [Atif, et al. (2012), Rudra (2004), Dani (1997) and McGuire (1999)]. The literature is growing rapidly. Analysts have documented the positive effects of government social spending [see for example Mesa-Lago (1994); Huber (1996); Weyland (1996); McGuire (1999)]. Unfortunately, Pakistan lacks empirical evidences on the impact of government social spending. Although Government of Pakistan has taken number of initiatives to have some form of redistribution policies, however, inequality in Pakistan is higher as compared to other Least Developed Countries that are open to trade. This situation is alarming. This paper therefore tries to identify the nexus between trade openness and social spending for the period 1975–2012. International evidence suggests that government social spending influences poverty and distribution of income. Pakistan‘s low level achievement in terms of reducing inequality, given the likely adverse economic impact of trade openness, point towards the fact that government has to design the policy in such a way that it affects the distribution of income. Thus, exploring the effect of social spending on income inequality is necessary for the concerned policy makers.
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Silva, Julie A., and Robin M. Leichenko. "Regional Income Inequality and International Trade." Economic Geography 80, no. 3 (February 16, 2009): 261–86. http://dx.doi.org/10.1111/j.1944-8287.2004.tb00235.x.
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Lin, Faqin, and Dahai Fu. "Trade, Institution Quality and Income Inequality." World Development 77 (January 2016): 129–42. http://dx.doi.org/10.1016/j.worlddev.2015.08.017.
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Choi, E. Kwan. "North–South trade and income inequality." International Review of Economics & Finance 16, no. 3 (January 2007): 347–56. http://dx.doi.org/10.1016/j.iref.2006.02.001.
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Xiao, Zihong. "Globalisation and Income Inequality." Advances in Economics, Management and Political Sciences 82, no. 1 (June 14, 2024): 295–304. http://dx.doi.org/10.54254/2754-1169/82/20230901.
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This study explores the relationship between globalization and income inequality. By examining data from various countries, we investigate how globalization, which involves increased cross-border interactions in trade and investment, impacts the differences in income levels among individuals. We use different methods to analyze this connection, including static and dynamic approaches. Our findings indicate income inequality decreases in wealthier nations when countries open to international trade. However, the impact of globalization through foreign investment on income inequality is more complex and can vary. Additionally, as countries experience economic growth, income inequality tends to increase. While unemployment and inflation can contribute to higher income inequality, the extent of their influence depends on the analytical approach used. Overall, this research sheds light on the complex interplay between globalization and income inequality, highlighting the multifaceted factors that shape economic disparities on a global scale.
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OGEDE, Jimoh S., Olukayode E. MAKU, Bamidele O. OSHINOWO, and Mojeed M. OLOGUNDUDU. "Trade Openess, FDI and Income Inequality: New Empirical Evidence from Nigeria." ACTA VŠFS 16, no. 1 (July 31, 2022): 8–22. http://dx.doi.org/10.37355/acta-2022/1-01.
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A huge number of empirical literature has carried investigation on trade openness-income inequality nexus globally. However, there are areas of knowledge gap on the part of the impacts of FDI inflows on inequality to the Nigerian economy. As a result of this knowledge gap and growing concern for variations in methodologies and scope which makes the debate on nexus between trade openness, FDI and income inequality not beyond controversy. Hence, this study examines the nexus between trade openness, FDI and income inequality in Nigeria between 1981 and 2019 using ARDL methodology. Our findings show that shows that trade openness exerts a negative effect on income inequality in the short-run. This implies that rising trade openness leads to decline in inequality. Equally, the study finds that FDI is negatively related to income inequality. The findings are in tandem the theoretical prediction of Stolper-Samuelson‘s theorem in case of Asia that trade openness and FDI inflow impact income inequality. The findings on government expenditure also exerts a positive effect on inequality. Given that proxies for institutional and macroeconomic determinants demonstrate a diverse variety of indications and effects, this study suggests a policy stimulus aimed at enhancing economic and social structures while also stimulating FDI influx potential in order to raise household incomes.
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Long, Xueqin. "Study on Whether International Trade Has Increased the Inequality in China's Domestic Income Distribution." Highlights in Business, Economics and Management 9 (June 13, 2023): 462–68. http://dx.doi.org/10.54097/hbem.v9i.9095.
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Inequality in income distribution is a major problem faced in China's and even global development, and has traditionally attracted much academic attention. How to reduce the income distribution gap and achieve common prosperity has also been an important concern of the government for a long time. Meanwhile, foreign trade plays a pivotal role in China's economic development, and along with the changes in the external trade environment and internal economic policies, the country is witnessing a new situation of full openness in all regions. Based on the above background, this paper investigates whether there is an impact of foreign trade on China's income distribution. The empirical results show that foreign trade has increased the income distribution inequality in China, and the impact of export trade on intra-regional income inequality is greater than that of import trade on intra-regional income inequality; the impact of export trade on income inequality in coastal cities is greater than that in inland cities, when viewed by coastal and inland. Finally, based on the empirical results, this paper puts forward three suggestions on narrowing the inequality of domestic income distribution: reasonable guidance of foreign investment, optimization of industrial structure, and increasing the cultivation of talents.
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Goh, Lim Thye, and Siong Hook Law. "The Effect of Trade Openness on Income Inequality with the Role of Institutional Quality." Indonesian Journal of Economics, Social, and Humanities 1, no. 2 (October 4, 2019): 65–76. http://dx.doi.org/10.31258/ijesh.1.2.65-76.
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This study investigates the effect of trade openness on income inequality using the panel system generalised method of moments (GMM). The sample countries consist of 65 developed and developing countries and the time period covers from 1984 to 2012. This study also provides new evidence that sheds light on the role of institutional quality in influencing the effectof trade openness on income inequality. The empirical results reveal that trade openness tends to increase income inequality. In addition, the marginal effect also revealed that institutional quality has a corrective effect on the trade openness – income inequality nexus.
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Gonese, Dorcas, Asrat Tsegaye, Forget Kapingura, and Sibanesizwe Alwyn Khumalo. "TRADE OPENNESS AND INCOME INEQUALITY: A CASE OF SOUTHERN AFRICAN DEVELOPMENT COMMUNITY COUNTRIES†." Eurasian Journal of Economics and Finance 10, no. 4 (2022): 135–51. http://dx.doi.org/10.15604/ejef.2022.10.04.002.
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This research aims to address one of the SADC regional indicative strategic plans (RISDP) and one of the 17 Sustainable Development Goals (SDG) objectives of reducing inequality in the face of increased trade openness. The paper uses the pooled mean group (PMG) estimation technique to examine the effect of trade openness on income inequality in 16 SADC countries from 1980 to 2019. The findings of the study reveal that trade openness worsens income inequality in the long run. Again, the findings of the results indicate that it is not only trading that matters on income inequality changes. Thus, trade openness reduces income inequality when economic growth, human capital index, and financial development are high. Yet, the mediating variable of trade openness and institutional quality has a positive and significant effect on income inequality in SADC countries. As a result, this study provides SADC policymakers and governments with some recommendations, such as investing more in high-quality education and strengthening financial institutions by reducing inequalities in the financial sector. Furthermore, effective policies to stimulate local production are needed to create jobs and improve the quality of institutions to reduce income inequality in the SADC region.
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Baek, Inmee, and Qichao Shi. "Impact of Economic Globalization on Income Inequality: Developed Economies vs Emerging Economies." Global Economy Journal 16, no. 1 (March 2016): 49–61. http://dx.doi.org/10.1515/gej-2015-0047.
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This paper studies income inequality and globalization by decomposing economic globalization into trade intensity and financial integration, and also by differentiating the effect of globalization across developed and developing countries. Using panel data on 26 developed countries and 52 developing countries for the 1990–2010 period when globalization was accelerated, this study finds that financial integration affects the income inequality differently from trade intensity and the effect is in contrast across two groups of countries. For example, an increase in trade intensity would widen income inequality in developed countries, but it would reduce the inequality in developing countries. And, a deepening of the financial integration would reduce the income inequality in developed countries but increase the inequality in developing countries. These results suggest that income inequality of developing countries would deteriorate with an imprudent dependence on foreign financing or a rapid opening up of their financial markets to foreign investors, or when faced with more barriers on free international trade.
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Hossain, Rabiul, Chandan Kumar Roy, and Rima Akter. "Economic Growth, FDI, Trade Openness, and Inequality: Standing of Asian Economies." Asian Development Policy Review 10, no. 4 (December 14, 2022): 317–30. http://dx.doi.org/10.55493/5008.v10i4.4691.
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The main objective of this study is to identify the effect of foreign direct investment (FDI) and trade openness (TO) on income inequality in 25 Asian economies using panel data from 1991 to 2018. The effects of FDI and trade openness on income inequality in the Asian region has been examined by using the Kuznets curve hypothesis on the growth–inequality relationship and employing a random effects model, generalized least squares, and system GMM estimations. This study found that the effect of FDI and trade openness on inequality is positive as they enhance income inequality in the Asian region. It also found that the growth–inequality relationship is non-linear with an inverted U-shape, which indicates that growth increases inequality in Asian economies to a certain level; after that, an additional increase in per capita GDP decreases the income inequality. This study exposed that FDI and trade openness have increased inequalities in the Asian region, making it difficult to achieve the Sustainable Development Goal (SDG) 10 within the stipulated timeframe. Asian economies should therefore review investment- and trade-related policies to reap the benefits and to ensure equitable income distribution.
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Ying, Fan, Azeem Fazwan Bin Ahmad Farouk, and Li Qing Lin. "Impact analysis of bilateral trade openness and income inequality based on the system GMM method: A case study of transnational dynamic panel data." International Journal of Applied Economics, Finance and Accounting 18, no. 2 (March 22, 2024): 411–23. http://dx.doi.org/10.33094/ijaefa.v18i2.1479.
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To analyze the impact of bilateral trade openness on income inequality, the study selected 16 countries with the highest global import and export trade rankings as research subjects, combined with cross-border dynamic panel data from 2005 to 2020, and used the Gaussian Mixture Model (GMM) to analyze the dynamic impact of natural and policy factors on domestic income inequality in the process of deepening bilateral trade openness. Empirical research has found that the policy-oriented expansion of openness in 16 countries has an inhibitory effect on domestic income inequality, while natural openness is influenced, to varying degrees, by different trading partners. High-quality education and sound infrastructure can help regulate income inequality. The results indicate that policy-based openness between 16 countries and those with weaker technological output, i.e., patent quantity, education level, i.e., higher education, and immigration, can suppress domestic income inequality, which is consistent with the expected hypothesis of the impact mechanism. The results indicate that in-depth research on the relationship between trade openness and income inequality can provide a basis for policymakers to adjust trade policies and provide recommendations to reduce income inequality. Meanwhile, the results and methods of this study can provide references for other scholars and promote research progress in related fields.
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Sampson, Thomas. "Technology Gaps, Trade, and Income." American Economic Review 113, no. 2 (February 1, 2023): 472–513. http://dx.doi.org/10.1257/aer.20201940.
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This paper quantifies the contribution of technology gaps to international income inequality. I develop an endogenous growth model where cross-country differences in R&D efficiency and cross-industry differences in innovation and adoption opportunities together determine equilibrium technology gaps, trade patterns, and income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries. I calibrate R&D efficiency by country and innovation dependence by industry using R&D, patent, and bilateral trade data. Counterfactual analysis implies technology gaps account for one-quarter to one-third of nominal wage variation within the OECD. (JEL D21, D24, D31, F14, O31, O33, O47)
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Dout, Hamitande, and Léleng Kebalo. "Trade Intensity, Fiscal Integration and Income Inequality in ECOWAS." Statistics, Politics and Policy 12, no. 2 (November 1, 2021): 375–94. http://dx.doi.org/10.1515/spp-2021-0008.
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Abstract This paper analyzes the income inequality effect of economic integration in ECOWAS by decomposing economic integration into two dimensions: trade and fiscal integration approximated respectively by trade intensity and fiscal convergence. For robustness purposes, we use different metrics for each dimension. We also consider the introduction in the region of the growth and convergence pact in the analysis of fiscal integration effect on income inequality. The analysis covers the period 1990–2018. For the empirical evidence, the generalized method of moment is used. The results obtained are robust and reveal that improving regional economic integration has a reducing effect on income inequality. Taken individually, trade integration and fiscal integration contribute to reducing income inequality. However, taken together, the reducing effect of economic integration on income inequality is more pronounced. Besides, the results indicate that fiscal integration has more contributed to the reduction of income inequality since the introduction of the first fiscal convergence pact in the region in 2000 than before. For reducing income inequality, our analysis recommends to ECOWAS countries to take steps to remove barriers to regional trade on the one hand, and on the other hand, to converge together on the fiscal front.
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Munir, Kashif, and Mahnoor Bukhari. "Impact of globalization on income inequality in Asian emerging economies." International Journal of Sociology and Social Policy 40, no. 1/2 (November 21, 2019): 44–57. http://dx.doi.org/10.1108/ijssp-08-2019-0167.
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Purpose The purpose of this paper is to examine the impact of three modes of globalization, i.e. trade globalization, financial globalization and technological globalization, separately on income inequality on the Asian emerging economies. Design/methodology/approach The study uses Hecksher–Ohlin and the Stolper–Samuelson theorem as a theoretical model for the relationship between globalization and income inequality. The study uses pooled least square (POLS) and instrumental variable least square (IVLS) estimation technique but prefers the IVLS over POLS due to the problems of omitted variable biased and endogeneity. Due to unavailability of data for all the Asian emerging economies, the study uses the following 11 countries, i.e. Bangladesh, China, India, Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Singapore, South Korea and Thailand, from 1980 to 2014 for the trade and technological globalization model and from 1990 to 2014 for the financial globalization model. Findings Trade globalization significantly contributes to reduce income inequality in the Asian emerging economies. The impact of financial globalization on income inequality suggests that financial integration causes an increase in income inequality. Therefore, the benefits of financial globalization are not evenly distributed among the rich and the poor. The impact of technological globalization significantly contributes in the reduction of income inequality. Practical implications Government has to invest in research and development activities, establish efficient financial system, reduce trade restrictions and provide subsidies that help to increase the volume of trade. Originality/value This study contributes in the existing literature by analyzing the impact of trade globalization, financial globalization and technological globalization on income inequality in Asian emerging economies. The study provides useful guidelines to policy makers and governments to make effective policies in relation to globalization and income inequality that lead toward economic growth and reducing income inequality.
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Bushra Khalil, Uzma Ghafoor, Muhammad Zubair Saeed, Asad Abbas, and Muhammad Ramzan Sheikh. "Technology, Trade, Foreign Direct Investment and Income Inequality Nexus in GCC Countries." Journal of Policy Research 10, no. 3 (September 1, 2024): 10–21. http://dx.doi.org/10.61506/02.00312.
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The purpose of this study is to analyze the nexus between Technology, Foreign Direct Investment, Trade and Income Inequality in GCC countries. The study used the panel dataset of GCC countries from the period of 1990 to 2021. The dependent variable used in a model is Income Inequality as measured by the GINI coefficient, while explanatory variables are GDP per capita growth, GDP per capita squared, foreign direct investment, inflation rate, unemployment rate, secondary school enrollment, trade, and information and communication technology. Different econometric techniques such as ARDL, Cross-Section, and Granger causality test are applied for data analysis. The Panel ARDL technique is used to estimate the results in which GDP per capita growth, inflation rate, unemployment rate, and information and communication technology index are positively and significantly related to income inequality while the variables square of GDP per capita, FDI, secondary school enrolment, and trade are negatively and significantly associated to the income inequality in GCC countries. Panel ARDL short-run outcomes found that the coefficient of the ECT (-1) is negative and also statistically significant. This indicates that 33.51 percent of errors are corrected when moving from the short-run to the long-run equilibrium. Panel Granger causality analysis found that there is a unidirectional causality between income inequality and GDP Per Capita, trade. There is no evidence of a causal relationship between income inequality and foreign direct investment, inflation, unemployment, secondary school enrolment, trade, the information and communication technology index. Additionally, there is no evidence of a causal relationship between the latter two variables and income inequality. Considering the study's findings, it is determined that technology, economic growth, unemployment, and inflation are encouraging income inequality in GCC countries while FDI and trade are playing an imperative role in declining the level of income inequality in GCC countries.
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Tam, Doan Ho Dan, Nguyen Phuc Phuong Vy, Nguyen Thi Xuan Tham, and Hoang Thi Ngoc Thang. "Trade and income distribution: Is natural disaster an actor?" ECONOMICS AND BUSINESS ADMINISTRATION 11, no. 1 (February 26, 2021): 60–72. http://dx.doi.org/10.46223/hcmcoujs.econ.en.11.1.1328.2021.
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This paper examines the impact of trade on household income inequality (measured using Gini index) under the condition of disaster (measured using various proxies). The paper uses panel regression on a balanced dataset of 48 countries for 2011-2017 to estimate the impacts, with data combined from World Development Indicators, World Income Inequality Database, and World Risk Report. Various robustness checks are also carried out. The results show that trade does not have any impact on inequality on its own. However, with the existence of disaster, the increase of trade leads to higher income inequality. Finally, the effects are stable when disaster is measured using Composite index or Vulnerability component but becomes not clear when using Exposure component, suggesting that it is vulnerability the main factor that moderates the impact of trade on income inequality.
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Gam, To Thi Hong, Dao Le Kieu Oanh, and Nguyen Mau Ba Dang. "The impact of foreign direct investment on income inequality in developing countries: The Bayesian approach." Jurnal Ekonomi & Studi Pembangunan 24, no. 1 (May 30, 2023): 127–43. http://dx.doi.org/10.18196/jesp.v24i1.18164.
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Inequality in general and income inequality in particular have existed for a long time and tend to increase daily. Foreign direct investment (FDI) is expected to be an important factor contributing to mitigating that situation. However, the results of previous empirical studies on the impact of FDI on income inequality have not reached a consistent conclusion. Therefore, this study evaluated the impact of foreign direct investment on income inequality in developing economies. The study has provided evidence that the relationship is nonlinear through data from a sample of 36 developing countries between 2008 and 2020 and the Monte-Carlo algorithm according to the Bayesian approach. We document a U-shaped effect of FDI on income inequality. Besides, other factors, including trade openness and migration, obviously impact income inequality. Different results were found when FDI interacted with trade or migration, representing important channels through which inequality is affected. With these results, we suggest that policymakers in developing countries should develop appropriate policies on FDI attraction encourage trade openness and migration to reduce income inequality.
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Agusalim, Lestari, and Fanny Suzuda Pohan. "Trade Openness Effect on Income Inequality: Empirical Evidence from Indonesia." Signifikan: Jurnal Ilmu Ekonomi 7, no. 1 (January 12, 2018): 1–14. http://dx.doi.org/10.15408/sjie.v7i1.5527.
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This research analyzed the effect of international trade openness to income inequality in Indonesia using Vector Error Correction Model (VECM). The data used is the secondary data, which are the export-import value, gross domestic product (GDP), GDP per capita, open unemployment rate, and Gini index. The results of this study indicate that in the short term the trade openness has negative impact significantly on the income inequality. However, in the long-run, it does not show any significant effect in decreasing the income inequality rate. The impulse response function (IRF) concluded that income inequality gives a positive response, except on the third year. Based on the forecast error variance decomposition (FEDV), the trade openness does not provide any significant contribution in effecting the income inequality in Indonesia, but economic growth does. Nevertheless, in long-term, the economic growth makes the income inequality getting worse than in the short-term.DOI: 10.15408/sjie.v7i1.5527
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Maku, Olukayode Emmanuel, Jimoh Sina Ogede, Oluwaseyi Adedayo Adelowokan, and Bamidele Olaitan Oshinowo. "Exploring the interaction of trade openness, income inequality, and poverty in Nigeria." Journal of Enterprise and Development 3, no. 2 (December 1, 2021): 113–30. http://dx.doi.org/10.20414/jed.v3i2.3966.
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The literature on the nexus between trade openness, income inequality and poverty appears conspicuously and of diverse outcomes. Perhaps, the mixed findings may be attributed to the methodology and economic structure of the country in view. The current study examines the trade openness on income inequality and poverty in Nigeria between 1981 and 2019 using Autoregressive Distributed Lags (ARDL) methodology. Our findings show that trade openness had different effects on inequality and poverty in Nigeria in the short and long run. While its relationship with inequality is a short-run phenomenon, it had a long-run relationship with poverty. Overall, trade openness had a declining effect on inequality and poverty. In the former, its impact was not statistically significant. However, the gains of trade openness on inequality and poverty were reversed when inequality influenced trade openness. In essence, with the influence of inequality, trade openness had an increasing effect on poverty. As a result, this study makes several recommendations to policymakers. To begin, a policy framework must be established to ensure that Nigerian trade is integrated with the rest of the world. Evidence from this study has suggested that policies such as restricting trade through border closures must not feature as a policy option as long as one of the goals of the economy is poverty reduction and reduction in inequality.
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Fattore, Christina, and Brian Fitzpatrick. "Perceived inequality and support for trade liberalization in Latin America." Journal of International Trade Law and Policy 15, no. 2/3 (June 20, 2016): 102–14. http://dx.doi.org/10.1108/jitlp-06-2016-0014.
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Purpose Previous studies have focused on individual preferences regarding trade liberalization without considering an individual’s perceptions of income inequality. This study aims to utilize the 2007 Latinobarametro to test a hypothesis regarding the relationship between an individual’s perceived income inequality and their support for trade liberalization in their country. The authors focus primarily on Latin America, as it is a region that has a long, entrenched tradition of income inequality with far reaching political and economic consequences. It is also a region that is relatively new to trade liberalization, as it only began to open up in the 1980s, after a decade-long commitment to import substitution industrialization. Design/methodology/approach The authors utilize a logit model to analyze the 2007 Latinobarametro data to test the hypothesis. Findings The authors find that individuals who perceive income inequality to be fair in their country are more likely to support trade liberalization, whereas those who perceive income inequality to be unfair are less likely to support liberalization. Originality/value This study allows for a more complete portrait of what influences individual preferences toward trade policy and advocates for policy elites to be more responsive to their citizens’ concerns about trade liberalization.
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Behzadan, Nazanin, and Richard Chisik. "Income inequality, international trade and firm location." Economics Letters 214 (May 2022): 110442. http://dx.doi.org/10.1016/j.econlet.2022.110442.
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Savvides, Andreas. "Trade policy and income inequality: new evidence." Economics Letters 61, no. 3 (December 1998): 365–72. http://dx.doi.org/10.1016/s0165-1765(98)00197-9.
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Meschi, Elena, and Marco Vivarelli. "Trade and Income Inequality in Developing Countries." World Development 37, no. 2 (February 2009): 287–302. http://dx.doi.org/10.1016/j.worlddev.2008.06.002.
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Demir, Firat, Jiandong Ju, and Yin Zhou. "Income inequality and structures of international trade." Asia-Pacific Journal of Accounting & Economics 19, no. 2 (August 2012): 167–80. http://dx.doi.org/10.1080/16081625.2012.667379.
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Chao, Chi-Chur, Mong Shan Ee, Xuan Nguyen, and Eden S. H. Yu. "Trade liberalization, firm entry, and income inequality." Review of International Economics 27, no. 4 (June 19, 2019): 1021–39. http://dx.doi.org/10.1111/roie.12413.
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Ngangué, Ngwen. "Financial Sector Development and Open Economy for Income Inequality Reduction: A Panel Fixed Model Analysis." International Journal of Economics and Finance 12, no. 4 (March 10, 2020): 33. http://dx.doi.org/10.5539/ijef.v12n4p33.
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This study utilizes a panel fixed model to analyze the impact of financial sector development and commercial openness on income disparity of 40 developing countries over the period between 1995 and 2016. The empirical results suggest that there is a relationship between financial sector development, trade openness and income inequality. We establish that, in Latin America, the financial sector development increases income inequality while in Subsaharian Africa, we show the existence of an inverted U-shaped relationship between financial development and income inequality. Trade openness increases income inequality in the 40 selected countries. The increasing of 1 percent of trade openness leads the rise of 0,077 and 0,068 percent of income inequality in Latin America and Subsaharian Africa respectively. To alleviate income inequality, the government should (1) more develop financial sector and socially wide-ranging over period, important to welfares for both the rich and poor, and (2) diversify its commercial and industrial base beyond primary products in order to export high value-added products to generate more resources, better distribute them between rich and poor, and create more job opportunities.
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Imadidin, Raiyatu, Dominicus Savio Priyarsono, and Widyastutik Widyastutik. "FASILITASI PERDAGANGAN, KINERJA EKSPOR, DAN KETIMPANGAN PENDAPATAN DI NEGARA-NEGARA RCEP." JURNAL EKONOMI DAN KEBIJAKAN PEMBANGUNAN 6, no. 2 (July 31, 2018): 32–46. http://dx.doi.org/10.29244/jekp.6.2.2017.32-46.
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The growth of global economic integration has added pressure for countries to reduce trade cost to make trades more profitable and to encourage their further development. As tariffs have progressively fallen, efforts in trimming trade costs have focused increasingly on non tariff measures, which have a detrimental impact on the free flow of international trade, as such trade facilitation is considered an important complement to trade liberalization efforts aimed at fostering economic integration. Trade is expected to increase overall national income. The increase in national income can be used to improve welfare by increasing household income which translates into inequality alleviation. Regional Comprehensive Economic Partnership (RCEP) is a form of cooperation between 16 countries in the Association of Southeast Asian Nation and other major trading partner countries. This study uses a simultaneous panel method to identify the trade facilitation, export performance, and income inequality by using 12 countries in the RCEP region during 2011-2015 period. The results show that the advantages of trade facilitation in RCEP associated with export performance to decrease inequality in RCEP region and RCEP developing countries, but increase increase in RCEP developed countries. Keywords: Export performance, Inequality, RCEP, Trade facilitation
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Imadidin, Raiyatu, Dominicus Savio Priyarsono, and Widyastutik Widyastutik. "FASILITASI PERDAGANGAN, KINERJA EKSPOR, DAN KETIMPANGAN PENDAPATAN DI NEGARA-NEGARA RCEP." JURNAL EKONOMI DAN KEBIJAKAN PEMBANGUNAN 6, no. 2 (July 31, 2018): 32–46. http://dx.doi.org/10.29244/jekp.6.2.32-46.
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The growth of global economic integration has added pressure for countries to reduce trade cost to make trades more profitable and to encourage their further development. As tariffs have progressively fallen, efforts in trimming trade costs have focused increasingly on non tariff measures, which have a detrimental impact on the free flow of international trade, as such trade facilitation is considered an important complement to trade liberalization efforts aimed at fostering economic integration. Trade is expected to increase overall national income. The increase in national income can be used to improve welfare by increasing household income which translates into inequality alleviation. Regional Comprehensive Economic Partnership (RCEP) is a form of cooperation between 16 countries in the Association of Southeast Asian Nation and other major trading partner countries. This study uses a simultaneous panel method to identify the trade facilitation, export performance, and income inequality by using 12 countries in the RCEP region during 2011-2015 period. The results show that the advantages of trade facilitation in RCEP associated with export performance to decrease inequality in RCEP region and RCEP developing countries, but increase increase in RCEP developed countries. Keywords: Export performance, Inequality, RCEP, Trade facilitation
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Da Cruz, Thiago Vizine, and Ricardo Luiz Machado. "The Impact of Sugarcane By-Product Exports on Income Inequality: How Sustainable Is This Relationship?" Sustainability 16, no. 10 (May 9, 2024): 3966. http://dx.doi.org/10.3390/su16103966.
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The reduction in income inequality and its convergence between localities is one of the aims of the United Nations Sustainable Development Goals. This work aims to contribute to the theme, researching the relationship among international trade, the export of sugarcane by-products, and income inequality. A panel data regression was performed for a group of 98 cities from the state of Goiás-Brazil. Results indicate that international trade has a minimal, though positive effect, reducing income inequality. Nevertheless, the export of sugarcane by-product results indicates a harmful effect on workers’ income in the poorest cities who work in the agricultural sector. The results indicate that international trade contributes to sustainable development by generating wealth, contributing to UN SDG number 1, and reducing income inequality, helping to achieve UN SDG number 10.
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Zhou, Jiaxuan, Jingru Xue, and Lanxin Liu. "Trade Globalization and Inequality: Evidence Across Economies." Advances in Economics, Management and Political Sciences 3, no. 1 (March 21, 2023): 122–32. http://dx.doi.org/10.54254/2754-1169/3/2022772.
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In recent years, trade globalization has experienced rapid growth, however, within many countries, income gap is also widening. Whether there exists causality needs further investigation. This work uses the panel of 166 countries during 1970-2018 and employs the exogeneous variation of trade globalization in the last period to explore its effect on income inequality. The paper finds trade globalization has a significantly positive effect on income inequality and it is robust when constructing instrument variables, considering long term effects or using changes in the regression. However, the effect varies in economies with different income and development levels, and technology, education, governance, policy and other factors may have important roles. Now, trade globalization is still a promising opportunity for all countries and each should develop discretionary policy to make the most of it.
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Yasmin, Bushra, and Wajeeha Qamar. "Implications of De-Industrialization for Poverty and Income-Inequality in Pakistan." Zagreb International Review of Economics and Business 18, no. 2 (November 1, 2015): 45–68. http://dx.doi.org/10.1515/zireb-2015-0009.
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Abstract This study endeavors to identify the dynamic link among growth, inequality and poverty, instigated from deindustrialization, in Pakistan over the time period 1970-2013. The Reduced-form Vector Autoregressive Model (VAR) is applied to estimate the empirical model. According to the results, trade openness has declining (mounting) impact on poverty (income inequality) over the specified time period. Moreover, the industrial sector share in GDP has appeared as a major contributing factor in tackling income inequality and poverty. This implies that the deindustrialization, as an emergent of trade liberalization, neutralizes the policy effect for income distribution and poverty in Pakistan. Besides, the Kuznet’s hypothesis has been proved to be true in case of Pakistan where GDP growth has led to increase in the income inequality. The role of industrial sector growth in tackling poverty and income inequality has emerged as vital but the move towards rapid trade liberalization has placed this sector in more competitive position and the persistent nature of income inequality has subdued the growth effects on poverty. The results underlie very pertinent policy to focus on the sector-specific growth in order to tackle the welfare issues. And a cautious move towards trade liberalization is also suggested.
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Lee, Kye Woo, and Chanyong Park. "Globalization, Growth, Inequality, and Social Safety Nets in APEC Economies." Asian Development Review 19, no. 02 (January 2002): 47–66. http://dx.doi.org/10.1142/s0116110502000076.
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This paper examines the forward linkage between trade liberalization and economic growth, economic growth and income inequality, and income inequality and economic growth, and inequality and social safety nets. It then suggests the directions for strengthening the social safety net in APEC member economies. The paper reviews major studies in recent years and concludes that in many countries trade openness is associated with more rapid growth, and economic growth with increased inequality. In addition, it shows that inequality is harmful for growth, and social safety nets are necessary for dealing with negative effects of growth engendered by trade and investment openness.
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KUO, KUO-HSING, and CHENG-TE LEE. "TECHNOLOGY ADVANTAGE, HETEROGENEOUS TALENT AND TRADE." Singapore Economic Review 63, no. 05 (December 2018): 1307–17. http://dx.doi.org/10.1142/s0217590816500119.
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This paper will setup a trade model to explore the impact of the diversity of talent distribution and the technology difference on the pattern of trade (POT) and income inequality of an economy. We find that not only the diversity effect but also the technology effect can matter for the pattern of POT. We demonstrate that, in the free-trade equilibrium, if the technology effect dominates the diversity effect then the country with a more (less) diverse distribution of talent may export the goods produced by a technology with supermodularity (submodularity). In addition, we prove that the relative technology difference will affect income inequality. If the technological advance for the submodular sector S is better than for the supermodular sector C, then income inequality would increase.
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Khan, Imran, and Zuhaba Nawaz. "Trade, FDI and income inequality: empirical evidence from CIS." International Journal of Development Issues 18, no. 1 (April 1, 2019): 88–108. http://dx.doi.org/10.1108/ijdi-07-2018-0107.
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Purpose The purpose of this study is to examine the relationship between trade, foreign direct investment (FDI) and income inequality for Commonwealth of Independent States (CIS), using annual data from 1990 to 2016. The study attempts to answer a critical question: does openness affect income distribution? Design/methodology/approach The analysis of the model involves the examination of likely non-linear effects of both trade and FDI on income distribution. Therefore, system-generalized method of moments (SYS-GMM) estimator was applied to mitigate the problem of non-linearity and possible endogeneity. In the second stage, the model was extended to test the impact of education on income inequality. The hypothesis is that secondary school enrollment speeds up the process of adoption of contemporary technology and decreases inequality. Findings Trade and FDI have significant effects on income inequality when interacted with Gini-index; in case of trade, an inverted U-shaped curve holds as purposed by the trade theory. The components-wise effect of trade was held, except imports from advanced countries was found insignificant. Moreover, results were not found significant in case of human development index. Different results were found when trade and FDI interacted with education, which represents an important channel through which inequality is affected. Research limitations/implications The study implies that CIS needs to re-design trade and FDI policies by encouraging trade and FDI inflows into industries and sectors aligned with structural adjustments, domestic industries uplift and investment in social infrastructure. Originality/value This is the first study that has examined the impact of openness of income distribution in case of CIS.
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Marjit, Sugata, Reza Oladi, and Punarjit Roychowdhury. "Income Distribution and Trade Pattern." Review of Economics 71, no. 1 (May 26, 2020): 1–14. http://dx.doi.org/10.1515/roe-2018-0029.
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AbstractMotivated by recent insights from behavioral economics and social psychology, we present a theory of trade that seeks to explain inter-industry trade between countries that are similar in their production sides, but differ in their income distribution. By assuming status-dependent preferences that are non-homothetic, we show that income inequality differential can be a basis for inter-industry trade between otherwise similar economies.