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Impact of Globalization on Income Distribution Inequality in 60 Countries

Author

Listed:
  • Zhou Lei

    () (MacroSys, LLC)

  • Biswas Basudeb

    () (Utah State University)

  • Bowles Tyler

    () (Utah State University)

  • Saunders Peter J

    () (Central Washington University)

Abstract

This paper investigates the impact of globalization on income inequality distribution in 60 developed, transitional, and developing countries. Using Kearney's (2002, 2003 and 2004) data and principal component analysis (PCA), two globalization indices are created. One of these indices is the equally weighted index. The other index is derived from the principal component analysis. The Gini coefficient of a country is regressed on each index, respectively, in all 60 test cases.The main contribution of this paper is its finding of a negative relationship between both globalization indices and the Gini coefficient for all 60 countries under investigation. Furthermore, test results indicate that this relationship is robust. Therefore, the empirical evidence presented in this paper supports the claim that globalization helps reduce income distribution inequality within countries.

Suggested Citation

  • Zhou Lei & Biswas Basudeb & Bowles Tyler & Saunders Peter J, 2011. "Impact of Globalization on Income Distribution Inequality in 60 Countries," Global Economy Journal, De Gruyter, vol. 11(1), pages 1-18, March.
  • Handle: RePEc:bpj:glecon:v:11:y:2011:i:1:n:1
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    References listed on IDEAS

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    1. J. David Richardson, 1995. "Income Inequality and Trade: How to Think, What to Conclude," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 33-55, Summer.
    2. Avik Chakrabarti, 2000. "Does Trade Cause Inequality?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 25(2), pages 1-21, December.
    3. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
    4. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
    5. Edwards, Sebastian, 1997. "Trade Policy, Growth, and Income Distribution," American Economic Review, American Economic Association, vol. 87(2), pages 205-210, May.
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    Cited by:

    1. Mahadevan, Renuka & Nugroho, Anda & Amir, Hidayat, 2017. "Do inward looking trade policies affect poverty and income inequality? Evidence from Indonesia's recent wave of rising protectionism," Economic Modelling, Elsevier, vol. 62(C), pages 23-34.
    2. Horgos Daniel, 2012. "International Outsourcing and Wage Rigidity," Global Economy Journal, De Gruyter, vol. 12(2), pages 1-28, June.
    3. repec:voj:journl:v:63:y:2016:i:5:p:581-601 is not listed on IDEAS
    4. John C. Anyanwu, 2016. "Empirical Analysis of the Main Drivers of Income Inequality in Southern Africa," Annals of Economics and Finance, Society for AEF, vol. 17(2), pages 337-364, November.
    5. Permani Risti, 2011. "The Impacts of Trade Liberalisation and Technological Change on GDP Growth in Indonesia: A Meta Regression Analysis," Global Economy Journal, De Gruyter, vol. 11(4), pages 1-30, December.

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