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Distributional Consequences of Globalisation: Empirical Evidence from Panel Data

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  • Mahvash Saeed Qureshi
  • Guanghua Wan

Abstract

This paper investigates the impact of globalisation on cross-country inequality using a large panel dataset. The findings reveal that location and capital are the main determinants of inequality; trade intensity and foreign direct investment make only a small contribution (approximately 4%). The relative contributions of trade and foreign direct investment to inequality have changed little over time and have certainly not increased at the same rate as the rise in global trade and investment activity. Hence, globalisation does not emerge as a significant factor in driving cross-country inequality. Differences emerge when countries are grouped by relative income, but the main findings persist.

Suggested Citation

  • Mahvash Saeed Qureshi & Guanghua Wan, 2008. "Distributional Consequences of Globalisation: Empirical Evidence from Panel Data," Journal of Development Studies, Taylor & Francis Journals, vol. 44(10), pages 1424-1449.
    • Handle: RePEc:taf:jdevst:v:44:y:2008:i:10:p:1424-1449
    DOI: 10.1080/00220380802265637
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    References listed on IDEAS

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    1. Guanghua Wan, 2002. "Regression-based Inequality Decomposition: Pitfalls and a Solution Procedure," WIDER Working Paper Series DP2002-101, World Institute for Development Economic Research (UNU-WIDER).
    2. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    3. Francisco Rodríguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338, National Bureau of Economic Research, Inc.
    4. Xavier Sala-i-Martin, 2001. "The disturbing 'rise' of global income inequality," Economics Working Papers 616, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2002.
    5. Matthew Higgins & Jeffrey G. Williamson, 1999. "Explaining Inequality the World Round: Cohort Size, Kuznets Curves, andOpenness," NBER Working Papers 7224, National Bureau of Economic Research, Inc.
    6. Mr. Arvind Subramanian & Mr. Francesco Trebbi & Mr. Dani Rodrik, 2002. "Institutions Rule: The Primacy of Institutions over Integration and Geography in Economic Development," IMF Working Papers 2002/189, International Monetary Fund.
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    Cited by:

    1. Riccardo Fiorentini & Guido Montani, 2012. "The New Global Political Economy," Books, Edward Elgar Publishing, number 14443.
    2. Muhammad Shahbaz & Ijaz Rehman & Nurul Mahdzan, 2014. "Linkages between income inequality, international remittances and economic growth in Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1511-1535, May.

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