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Trade and Income Inequality in Developing Countries

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  • Meschi, Elena
  • Vivarelli, Marco

Abstract

Summary We use a dynamic specification to estimate the impact of trade on within-country income inequality in a sample of 65 developing countries (DCs) over the 1980-99 period. Our results suggest that trade with high income countries worsen income distribution in DCs, through both imports and exports. These findings provide support to the hypothesis that technological differentials and the skill biased nature of new technologies may be important factors in shaping the distributive effects of trade. Moreover, we observe that the previous results only hold for middle-income countries (MICs); we interpret this evidence by considering the greater potential for technological upgrading in MICs.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 37 (2009)
Issue (Month): 2 (February)
Pages: 287-302

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Handle: RePEc:eee:wdevel:v:37:y:2009:i:2:p:287-302

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: globalization within-country income distribution technology transfer developing countries LSDVC estimator;

References

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Citations

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Cited by:
  1. Nathalie Chusseau & Joel Hellier, . "Inequality in emerging countries," Working Papers 256, ECINEQ, Society for the Study of Economic Inequality.
  2. Marco Vivarelli, 2011. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature," IDB Publications 61058, Inter-American Development Bank.
  3. Pulok, Mohammad Habibullah, 2012. "Revisiting Health and Income Inequality Relationship:Evidence from Developing Countries," MPRA Paper 39766, University Library of Munich, Germany.
  4. Srour, Ilina & Taymaz, Erol & Vivarelli, Marco, 2013. "Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata," IZA Discussion Papers 7320, Institute for the Study of Labor (IZA).
  5. Oscar Afonso, 2012. "Scale-independent North-South trade effects on the technological-knowledge bias and on wage inequality," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(1), pages 181-207, April.
  6. Pietro Moncada-Paterno-Castello & Peter Voigt & Marco Vivarelli, 2011. "Evolution of Globalised business R&D: Features, drivers, impacts," JRC-IPTS Working Papers on Corporate R&D and Innovation 2011-02, Institute of Prospective Technological Studies.
  7. Bruno Cesar Araujo & Francesco Bogliacino & Marco Vivarelli, 2009. "The Role of "Skill enhancing Trade" in Brazil: Some Evidence from Microdata," Jena Economic Research Papers 2009-041, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  8. Doris A. Oberdabernig, 2012. "Revisiting the Effects of IMF Programs on Poverty and Inequality," Department of Economics Working Papers wuwp144, Vienna University of Economics, Department of Economics.
  9. Sadullah Çelik & Ulkem Basdas, 2010. "How Does Globalization Affect Income Inequality? A Panel Data Analysis," International Advances in Economic Research, Springer, vol. 16(4), pages 358-370, November.
  10. Isabelle Bensidoun & Sébastien Jean & Aude Sztulman, 2011. "International trade and income distribution: reconsidering the evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 147(4), pages 593-619, November.
  11. Gianluca Grimalda & Marco Vivarelli, 2010. "Is inequality the price to pay for higher growth in middle-income countries?," Journal of Evolutionary Economics, Springer, vol. 20(2), pages 265-306, April.
  12. Dierk Herzer & Peter Nunnenkamp, 2011. "Income Inequality and Health: New Evidence from Panel Data," Kiel Working Papers 1736, Kiel Institute for the World Economy.
  13. Calì, Massimiliano & Sen, Kunal, 2011. "Do Effective State Business Relations Matter for Economic Growth? Evidence from Indian States," World Development, Elsevier, vol. 39(9), pages 1542-1557, September.
  14. Guerriero, Marta & Sen, Kunal, 2012. "What Determines the Share of Labour in National Income? A Cross-Country Analysis," IZA Discussion Papers 6643, Institute for the Study of Labor (IZA).
  15. Dierk Herzer, Peter Nunnenkamp, 2012. "The Effect of Foreign Aid on Income Inequality: Evidence from Panel Cointegration," Kiel Working Papers 1762, Kiel Institute for the World Economy.
  16. Massimiliano Calì, 2012. "Trade Liberalisation Does Not Always Raise Wage Premia: Evidence from Ugandan Districts," SERC Discussion Papers 0114, Spatial Economics Research Centre, LSE.
  17. Bruno Cesar Araújo & Francesco Bogliacino & Marco Vivarelli, 2011. "Technology, trade and skills in Brazil: Some evidence from microdata," DISES - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1171, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  18. Shahbaz, Muhammad & Ur Rehman, Ijaz & Ahmad Mahdzan, Nurul Shahnaz, 2013. "Linkages between Income Inequality, International Remittances and Economic Growth in Pakistan," MPRA Paper 45577, University Library of Munich, Germany, revised 20 Mar 2013.
  19. Caroline DAYMON, 2012. "Ouverture Commerciale, Inégalités De Revenu Et Répartition Salariale Dans Les Pays Du Sud Et De L’Est De La Méditerranée," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 35, pages 81-98.

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