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Is Globalization Reducing Absolute Poverty?

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  • Bergh, Andreas
  • Nilsson, Therese

Abstract

Using data from 114 countries (1983–2007), we examine the relationship between globalization and World Bank absolute poverty estimates. We find a significant negative correlation between globalization and poverty, robust to several econometric specifications, including a fixed-effect panel—a “long run” first difference—and a pooled OLS-regression. Introducing two instruments for globalization we also show that results are robust to correction for potential endogeneity. We motivate and test the instruments in several ways. In particular information flows and more liberal trade restrictions robustly correlate with lower absolute poverty.

Suggested Citation

  • Bergh, Andreas & Nilsson, Therese, 2014. "Is Globalization Reducing Absolute Poverty?," World Development, Elsevier, vol. 62(C), pages 42-61.
  • Handle: RePEc:eee:wdevel:v:62:y:2014:i:c:p:42-61
    DOI: 10.1016/j.worlddev.2014.04.007
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    1. repec:eee:rensus:v:74:y:2017:i:c:p:110-115 is not listed on IDEAS
    2. Florian Dorn & Clemens Fuest & Niklas Potrafke, 2017. "Globalisation and Income Inequality Revisited," European Economy - Discussion Papers 2015 - 056, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Hajer Kratou & Mohamed Goaied, 2016. "How Can Globalization Affect Income Distribution? Evidence from Developing Countries," The International Trade Journal, Taylor & Francis Journals, vol. 30(2), pages 132-158, March.
    4. repec:taf:apeclt:v:23:y:2016:i:10:p:708-712 is not listed on IDEAS
    5. Björn Kauder & Niklas Potrafke, 2015. "Globalization and social justice in OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 353-376, May.
    6. Chien-Chiang Lee & Chi-Chuan Lee & Chun-Ping Chang, 2015. "Globalization, Economic Growth and Institutional Development in China," Global Economic Review, Taylor & Francis Journals, vol. 44(1), pages 31-63, March.
    7. Lorenza Campagnolo & Fabio Eboli & Marinella Davide, 2016. "Can Paris deal boost SDGs achievement? An assesment of climate-sustainabilty co-benefits or side-effects," EcoMod2016 9635, EcoMod.
    8. Altuð Kazar & Görkemli Kazar, 2016. "Globalization, Financial Development and Economic Growth," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 578-587.
    9. Welander, Anna & Lyttkens, Carl Hampus & Nilsson, Therese, 2015. "Globalization, democracy, and child health in developing countries," Social Science & Medicine, Elsevier, vol. 136, pages 52-63.
    10. repec:eee:iepoli:v:43:y:2018:i:c:p:34-47 is not listed on IDEAS

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    Keywords

    globalization; poverty; panel data; endogeneity;

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