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The Impacts Of Globalization On The Labor Share: Evidence From Asia

Author

Listed:
  • XIAOSHAN HU

    (Institute of World Economy, Fudan University, Shanghai 200433, P. R. China)

  • GUANGHUA WAN

    (Institute of World Economy, Fudan University, Shanghai 200433, P. R. China)

  • JING WANG

    (School of Economics, Research Center for Economy of Upper Reaches of the Yangtze River, Center for Southeast Asian Studies, Chongqing Technology and Business University, Nan’an District, Chongqing 400067, P. R. China)

Abstract

The decline in the share of labor income — an indicator of functional income distribution — has contributed to rising income inequality world-wide. Despite a growing literature, little is known about the effects of globalization on the labor share or inequality in Asia where some of the economies are most globalized. Applying fixed-effect regressions to panel data from 29 Asian economies over the period from 1980 to 2014, we focus on the impacts of globalization on the labor share in Asia where globalization is measured by trade openness and FDI. The modeling results show that trade openness is a significant determinant of the labor share. More specifically, the impact of export is significantly negative and the impact of import is positive. In terms of FDI, the coefficient of the inward FDI is significantly positive and that of the outward FDI is significantly negative in developing countries only.

Suggested Citation

  • Xiaoshan Hu & Guanghua Wan & Jing Wang, 2020. "The Impacts Of Globalization On The Labor Share: Evidence From Asia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(supp01), pages 57-73, December.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:supp01:n:s0217590820440038
    DOI: 10.1142/S0217590820440038
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    Cited by:

    1. Raihan, Selim, 2022. "What Does Data on Functional Income Distribution tell us about Trends in and Correlates of Income Inequality in The Asia-Pacific?," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(3), pages 45-64.
    2. Arif, Imran, 2021. "Productive knowledge, economic sophistication, and labor share," World Development, Elsevier, vol. 139(C).
    3. Manuel Gómez‐Zaldívar & María Isabel Osorio‐Caballero & Edgar Juan Saucedo‐Acosta, 2022. "Income inequality and economic complexity: Evidence from Mexican states," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(6), pages 344-363, December.

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