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Foreign Direct Investment and Income Distribution: Evidence from Post-Communist New EU Member States

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  • Kosta Josifidis
  • Novica Supic
  • Nikolina Doroskov

Abstract

This article gives insight into the influence of FDI on income distribution in post-communist new EU member states. Using the method of seemingly unrelated regressions on panel data from 1990–2014, we find robust evidence of a nonlinear relationship between FDI and income distribution. The observed FDI effect varies by income shares. In the case of the bottom 50% income share, the impact of FDI on income concentration is homogeneous and negative; for the middle 40%, FDI first increases and then reduces its income share, whereas for the top 10% this effect is first negative and then positive.

Suggested Citation

  • Kosta Josifidis & Novica Supic & Nikolina Doroskov, 2020. "Foreign Direct Investment and Income Distribution: Evidence from Post-Communist New EU Member States," Eastern European Economics, Taylor & Francis Journals, vol. 58(6), pages 497-516, November.
    • Handle: RePEc:mes:eaeuec:v:58:y:2020:i:6:p:497-516
    DOI: 10.1080/00128775.2020.1762496
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    Cited by:

    1. Halina Shmarlouskaya & Natallia Shalupayeva & Alina Danileviča & Alina Betlej & Ludmila Aleksejeva, 2021. "Foreign direct investment as a factor of trade development: cases of selected countries," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(2), pages 384-401, December.
    2. , Le Thanh Tung, 2022. "Impact of foreign direct investment on inequality in emerging economies: Does the Kuznets curve hypothesis exist?," OSF Preprints 34fmy, Center for Open Science.

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