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The effects of trade openness on income inequality - evidence from BRIC countries

Author

Listed:
  • Malvika Mahesh

    (Jawaharlal Nehru University)

Abstract

In the last few decades, a lot of countries opened their economies to trade. And as a result, the share of world trade in world output increased from 33 percent in 1975 to 59 percent in 2013. These same years also witnessed an increasing income gap between developed and developing countries, in addition to income inequality within countries. I look into the relationship between trade openness and income distribution in greater detail in this paper. I conduct my analysis for the BRIC countries, namely, Brazil, the Russian Federation, India, and China. In my analysis, I find that an increase in trade as a percentage of GDP has in fact resulted in the worsening of the income distributions in these countries.

Suggested Citation

  • Malvika Mahesh, 2016. "The effects of trade openness on income inequality - evidence from BRIC countries," Economics Bulletin, AccessEcon, vol. 36(3), pages 1751-1761.
    • Handle: RePEc:ebl:ecbull:eb-16-00156
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    References listed on IDEAS

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    Cited by:

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    2. Stefan Jestl & Sandra M. Leitner & Sebastian Leitner, 2022. "The relative impact of different forces of globalization on wage inequality: A fresh look at the EU experience," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1003-1037, September.
    3. Thang Cong Nguyen & Tan Ngoc Vu & Duc Hong Vo & Dao Thi-Thieu Ha, 2019. "Financial Development and Income Inequality in Emerging Markets: A New Approach," JRFM, MDPI, vol. 12(4), pages 1-14, November.
    4. Huang, Kaixing & Yan, Wenshou & Sim, Nicholas & Guo, Yuqing & Xie, Fang, 2022. "Can trade explain the rising trends in income inequality? Insights from 40 years of empirical studies," Economic Modelling, Elsevier, vol. 107(C).
    5. Antonio N. Bojanic & LaPorchia A. Collins, 2021. "Differential effects of decentralization on income inequality: evidence from developed and developing countries," Empirical Economics, Springer, vol. 60(4), pages 1969-2004, April.
    6. Yong Liu & Cuihong Long, 2021. "Urban and Rural Income Gap: Does Urban Spatial Form Matter in China?," SAGE Open, , vol. 11(1), pages 21582440211, March.
    7. Cong Wang & Amjad Naveed, 2021. "Can Women Empowerment Explain Cross-Country Differences in Inequality? A Global Perspective," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 667-697, December.
    8. Munem Ahmad Chowdhury & Hafsa Rahman Nijhum & Kazi Mohammed Kamal Uddin, 2021. "Disintegrated Impact of Trade Openness on Income Inequality: Empirical Evidence from Bangladesh," Business and Economic Research, Macrothink Institute, vol. 11(3), pages 1-18, December.
    9. Koudalo, Yawovi M.A. & Wu, Ji, 2022. "Does financial liberalization reduce income inequality? Evidence from Africa," Emerging Markets Review, Elsevier, vol. 53(C).
    10. Martin Ambassa Messy & Itchoko Motande Mondjeli Mwa Ndjokou, 2021. "Taxation and Income Inequality in Sub-Saharan Africa," Economics Bulletin, AccessEcon, vol. 41(3), pages 1153-1164.
    11. Joshua Dennis Hall, 2018. "The effects of the quality and quantity of education on income inequality," Economics Bulletin, AccessEcon, vol. 38(4), pages 2476-2489.
    12. Christiana Manu, 2021. "Effect of Globalization on Income Inequality in Ghana," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(2), pages 1-15, February.

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    More about this item

    Keywords

    Income inequality; trade; BRIC countries;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F1 - International Economics - - Trade

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