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Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence

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Author Info

  • Neutel, Marcel

    () (University of Groningen)

  • Heshmati, Almas

    () (Sogang University)

Abstract

In this research, the relationship between globalisation and poverty and income inequality is determined. A whole new globalisation index has been constructed based on data covering a large sample of 65 developing countries. The index is based on the globalisation index proposed by A.T. Kearney / Foreign Policy Magazine. The index is composed of four sub-indices, namely: economic integration, personal contacts, technological connections and political engagement. Results from cross-sectional regression analysis show that there is a significant relationship between globalisation and poverty and income inequality. Globalisation leads to poverty reduction and it reduces income inequality. The relationship between globalisation and poverty remains significant when controlled for regional heterogeneity. A non-linear analysis shows that poverty has diminishing returns to benefits from globalisation.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2223.

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Length: 39 pages
Date of creation: Jul 2006
Date of revision:
Publication status: published in: Vandana Sjajan (ed.), Globalization and Income Inequality, The ICFAI University Press: Hyderabad, 2010
Handle: RePEc:iza:izadps:dp2223

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Keywords: globalisation; poverty; inequality; indices;

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References

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  1. repec:imf:imfocp:220 is not listed on IDEAS
  2. Wade, Robert Hunter, 2004. "Is Globalization Reducing Poverty and Inequality?," World Development, Elsevier, vol. 32(4), pages 567-589, April.
  3. Heshmati, Almas, 2004. "Data Issues and Databases Used in Analysis of Growth, Poverty and Economic Inequality," IZA Discussion Papers 1263, Institute for the Study of Labor (IZA).
  4. Martin Ravallion, 2004. "The Debate on Globalization, Poverty and Inequality: why Measurement Matters," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
  5. Dollar, David & Kraay, Aart, 2001. "Trade, growth, and poverty," Policy Research Working Paper Series 2615, The World Bank.
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Cited by:
  1. Muhammad, Shahbaz & Tiwari, Aviral & Reza, Sherafatian-Jahromi, 2012. "Financial Development and Income Inequality: Is there any Financial Kuznets curve in Iran?," MPRA Paper 40899, University Library of Munich, Germany, revised 26 Aug 2012.
  2. Rana Ejaz Ali Khan & Nadia Bashir, 2011. "Trade Liberalization, Poverty and Inequality Nexus: A Case Study of India," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(3), pages 114-119, September.
  3. Chambers, Dustin & Wu, Ying & Yao, Hong, 2008. "The impact of past growth on poverty in Chinese provinces," Journal of Asian Economics, Elsevier, vol. 19(4), pages 348-357, August.

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