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Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence

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Author Info
Marcel Neutel () (University of Groningen)
Almas Heshmati () (University of Kurdistan - Hawler, TEPP, Seoul National University and IZA Bonn)

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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 subindices, 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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Publisher 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
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Handle: RePEc:iza:izadps:dp2223

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Related research
Keywords: globalisation poverty inequality indices

Find related papers by JEL classification:
C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
F15 - International Economics - - Trade - - - Economic Integration
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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). [Downloadable!]
  2. Ravallion, Martin, 2003. "The debate on globalization, poverty, and inequality : why measurement matters," Policy Research Working Paper Series 3038, The World Bank. [Downloadable!]
  3. Kenneth Rogoff & M. Ayhan Kose & Eswar Prasad & Shang-Jin Wei, 2004. "Effects on Financial Globalization on Developing Countries: Some Empirical Evidence," IMF Occasional Papers 220, International Monetary Fund.
  4. Dollar, David & Kraay, Aart, 2001. "Trade, growth, and poverty," Policy Research Working Paper Series 2615, The World Bank. [Downloadable!]
    Other versions:
  5. Wade, Robert Hunter, 2004. "Is Globalization Reducing Poverty and Inequality?," World Development, Elsevier, vol. 32(4), pages 567-589, April. [Downloadable!] (restricted)
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This page was last updated on 2008-7-21.

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