Atif, Syed Muhammad and Srivastav, Mudit and Sauytbekova, Moldir and Arachchige, Udeni Kathri (2012): Globalization and Income Inequality: A Panel Data Analysis of 68 Countries.
Download (947kB) | Preview
The causal effect of globalisation on income inequality is an issue of significant academic interest. On the one hand globalisation is considered to promote global economic growth and social progress, while on the other; it is blamed for growing income inequality and environmental degradation, causing social degeneration and difficulty of competition.
The objective of the study is to determine the direction of impact of globalization on income distribution. This study hypothesises that increased globalisation worsens income inequality, and vice versa. This hypothesis is investigated using panel data econometric techniques to examine income inequality index and the index of globalization for panel data of 68 developing countries over the period of 1990-2010.
The analysis shows that an increase in globalisation (represented by an increase in the KOF coefficient) leads to an increase in the level of income inequality. It is worth noting, however, that this analysis also suffers from several limitations. It is possible perhaps a simple, overarching relationship does not exist. Rather it is possible that the impact of globalisation on income distribution varies between nations, depending on the structures and institutions that are in place in each country.
|Item Type:||MPRA Paper|
|Original Title:||Globalization and Income Inequality: A Panel Data Analysis of 68 Countries|
|Keywords:||Globalization; Income Inequality; Panel Data|
|Subjects:||C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||Syed Muhammad Atif|
|Date Deposited:||05. Nov 2012 05:12|
|Last Modified:||24. Apr 2015 12:32|
Atif, SM, Endres, J, & Macdonal, J, 2012, ‘Broadband Infrastructure and Economic Growth: A Panel Data Analysis of OECD Countries,’ MPRA Paper No. 42177, pp.1-16, retrieved at: http://mpra.ub.uni-muenchen.de/42177/
Atif, SM, & Mohazzam, S, 2010, ‘Inclusive Growth Strategies for Pakistan -- Myth or Reality for Policymakers!’, MPRA Paper No. 41376, pp.1-23 , retrieved at: http://mpra.ub.uni-muenchen.de/41376
Atif, SM, & Siddiqi, MW, 2010, ‘The Electricity Consumption and Economic Growth Nexus in Pakistan: A New Evidence’, Social Science Research Network, pp.01-23, retrieved at: http://ssrn.com/abstract=1569580
Banerjee, SB, & Linstead, S 2001, ‘Globalization, Multiculturalism and Other Fictions: Colonialism for the New Millenium?’, Organization, vol. 8 no. 4, pp. 683-722.
Bergh, A & Nilsson, T 2011, ‘Do liberalisation and globalisation increase income inequality?’, European Journal of Political Economy, vol. 26, pp. 488-505.
Bhagwati, J 2004, ‘In Defense of Globalization’, New York: Oxford University Press, p. 3.
Borjas, GJ & Ramey, VA 1994, ‘Time-Series Evidence on the Sources of Trends in Wage Inequality’, The American Economic Review, vol. 84, pp. 10-16.
Cornia, GA 2004, ‘Inequality, Growth, and Poverty in an Era of Liberalization and Globalization’, New York: Oxford University Press, Inc.
Dirlik, A 2002, ‘Rethinking Colonialism: Globalization, Postcolonialism, and The Nation, Interventions’, International Journal of Postcolonial Studies, vol. 4 no. 3, pp. 428-448.
Dreher, A 2006, ‘Does Globalization Affect Growth? Evidence from a new Index of Globalization’, Applied Economics, vol. 38 no. 10, pp. 1091-1110.
Dreher, A, Gaston, N & Martens, P 2008, ‘Measuring Globalisation – Gauging its Consequence’, New York: Springer.
Edwards, S 1997, ‘Trade Policy, Growth, and Income Distribution’, The American Economic Review, vol. 87 no. 2, pp. 205-10.
Marjit, S, Beladi, H, & Chakrabarti, A, 2004, ‘Trade and Wage inequality in Developing Countries’, Economic Inquiry, vol. 42 no. 2, pp. 295-303.
OECD 2005, ‘OECD Handbook on Economic Globalisation Indicators’, pp. 11, viewed 3 October 2012, http://www.realinstitutoelcano.org/materiales/docs/OCDE_handbook.pdf
Pillay, P 2001, Globalization is a new word for colonialism, Abstract, Brantford: CanWest Digital Media, http://search.proquest.com.ezproxy1.library.usyd.edu.au/docview/345900105/abstract?accountid=14757
Sibley SS 1997, ‘Let them eat the cake, Globalization, Postmodern Colonialism, and the Possibilities of Justice’, Law & Society Review, vol. 31 no. 2, pp. 207-235.
Stiglitz, J 2002, ‘Globalization and its Discontents’, New York: W. W. Norton.
Stiglitz, J2006, ‘Making Globalization Work’, New York: W. W. Norton, pp.8
UNDP 2012, ‘Human Development Report 2011,, Data and Indices, viewed 04 October 2012, http://hdr.undp.org/en/statistics/
World Bank 2012, ‘World Development Indicators’, viewed 24 September 2012, http://databank.worldbank.org/ddp/home.do
Zhou, L, Biswas, B, Bowles, T, & Saunders, PJ 2011, ‘Impact of globalization on Income Distribution Inequality in 60 countries’, Global Economy Journal, vol. 11 no. 1, pp. 1-18,