Impact of Globalization on Income Inequality in Selected Asian Countries

Bukhari, Mahnoor and Munir, Kashif (2016): Impact of Globalization on Income Inequality in Selected Asian Countries.

Abstract

The primary objective of this study is to investigate the relationship between globalization and income inequality in selected Asian economies i.e. Bangladesh, China, India, Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Singapore, South Korea and Thailand. The specific objectives of this study are to analyze the relationship between trade globalization, financial globalization and technological globalization on income inequality. For attaining these objectives this study used panel data for selected Asian countries from 1980 to 2014 for trade and technological globalization model and from 1990 to 2014 for financial globalization model. The study used pooled OLS and instrumental variable least square technique for estimation. Results show that trade and technological globalization in the selected Asian economies significantly contributes to reduce income inequality while financial globalization increase income inequality. Education has inverse impact on income inequality while foreign direct investment has positive relationship with income inequality. Therefore, the study suggest that government should promote education, invest in research and development activities, establish efficient financial system, reduce trade restrictions and provide subsidies that help to increase the volume of trade.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trade, Financial, Technological Globalization, Income Inequality, Panel Data, Asia
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; F - International Economics > F6 - Economic Impacts of Globalization > F62 - Macroeconomic Impacts; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East

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