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Globalization and Inequality in Different Economic Blocks

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  • Seyed Komail Tayebi

    ()
    (Associate Professor, Department of Economics, University of Isfahan, Iran)

  • Sepideh Ohadi Esfahani

    (M. A. in Economics, Islamic Azad University, Khorasgan Branch)

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    Abstract

    Now many scholars debate the different impacts of globalization on the economic behaviors of all nations, that globalization reduces or increases poverty, raises or drops wages and labor standards in societies and so on. Accordingly, we make in particular a question whether globalization affects income inequality in countries worldwide. The objective of this paper is thus to evaluate the effect of globalization on inequality among nations. We specify a panel income distribution regression model using cross-sectional data of the selected countries (including Iran) and relevant time series over 1985-2004. Several specified for globalization have significant and different effects on income distribution of countries with different levels of income. In our augmented model specification, we also evaluate an interacted effect of a block implementation (e.g. emerging market economies, high income, middle income and low income countries) with globalization on inequality. The results confirm this effect significantly on income inequality.

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    Bibliographic Info

    Article provided by Economics faculty of Tehran university in its journal Iranian Economic Review.

    Volume (Year): 14 (2009)
    Issue (Month): 2 (fall)
    Pages: 135-151

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    Handle: RePEc:eut:journl:v:14:y:2009:i:2:p:135

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    Keywords: Globalization; Inequality; World Economy; Panel Data.;

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    1. Paolo Figini & Holger Görg, 1998. "Multinational Companies and Wage Inequality in the Host Country: The Case of Ireland," Economics Technical Papers 9816, Trinity College Dublin, Department of Economics.
    2. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
    3. François Bourguignon & Christian Morrisson, 2002. "Inequality Among World Citizens: 1820-1992," American Economic Review, American Economic Association, vol. 92(4), pages 727-744, September.
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