Income Inequality and FDI in Turkey: FM-OLS (Phillips-Hansen) Estimation and ARDL Approach to Cointegration
This paper examines the long-run impact of foreign direct investment (FDI) on and the other determinants of income inequality in Turkey. Using a linear income inequality model, we apply the (ARDL) approach to cointegration which is more appropriate for estimation in small sample studies. The long-run results are also estimated by using the fully modified ordinary least squares (FMOLS) method. These methodologies, while proven to produce reliable estimates in small sample sizes, provide a check for the robustness of results. The data span for the study is from 1990 to 2006. The empirical results indicate the existence of a cointegration relationship among the variables. The results also point to a positive impact of FDI on income inequality which is consistent with other past studies. The positive impact of FDI growth rate on income inequality is shown to be significant in the short-run but not in the long-run.
|Date of creation:||21 Jan 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Daniel Miles & Máximo Rossi, 2001. "Wage Inequality in Developing Countries: Market Forces or Government Intervention," Documentos de Trabajo (working papers) 1001, Department of Economics - dECON.
- Julien Gourdon, 2011.
"Trade and Wage Inequality in Developing Countries: South-South Trade Matter,"
- Julien Gourdon, 2011. "Wage inequality in developing countries: South–South trade matters," International Review of Economics, Springer, vol. 58(4), pages 359-383, December.
- Gourdon, Julien, 2007. "Trade and Wage Inequality in Developing Countries: South-South Trade Matters," MPRA Paper 4177, University Library of Munich, Germany.
- Julien GOURDON, 2007. "Trade and Wage Inequality in Developing Countries: South-South Trade Matter," Working Papers 200710, CERDI.
- Cortez, Willy W., 2001. "What is Behind Increasing Wage Inequality in Mexico?," World Development, Elsevier, vol. 29(11), pages 1905-1922, November.
- Kijima, Yoko, 2006. "Why did wage inequality increase? Evidence from urban India 1983-99," Journal of Development Economics, Elsevier, vol. 81(1), pages 97-117, October.
- Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-27, September.
- Jensen, Nathan M. & Rosas, Guillermo, 2007. "Foreign Direct Investment and Income Inequality in Mexico, 1990 2000," International Organization, Cambridge University Press, vol. 61(03), pages 467-487, July.
- Edward Anderson & Paul J. G. Tang & Adrian Wood, 2006. "Globalization, co-operation costs, and wage inequalities," Oxford Economic Papers, Oxford University Press, vol. 58(4), pages 569-595, October.
- Changkyu Choi, 2006. "Does foreign direct investment affect domestic income inequality?," Applied Economics Letters, Taylor & Francis Journals, vol. 13(12), pages 811-814.
- Pesaran, M.H., 1996.
"The Role of Economic Theory in Modelling the Long Run,"
Cambridge Working Papers in Economics
9612, Faculty of Economics, University of Cambridge.
- Pesaran, M Hashem, 1997. "The Role of Economic Theory in Modelling the Long Run," Economic Journal, Royal Economic Society, vol. 107(440), pages 178-91, January.
- Vassilis T. Rapanos, 2004. "Minimum Wage And Income Distribution In Developing Countries," International Trade 0404005, EconWPA.
- M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
- Munshi, Farzana, 2006. "Does openness reduce wage inequality in developing countries? A panel data analysis," Working Papers in Economics 241, University of Gothenburg, Department of Economics, revised 06 Feb 2008.
- Basu, Parantap & Guariglia, Alessandra, 2007. "Foreign Direct Investment, inequality, and growth," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 824-839, December.
- Willem te Velde , Dirk, 2003. "Foreign Direct Investment and Income Inequality in Latin America," Documentos de trabajo 4/2003, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
- Pan-Long Tsai, 1995. "Foreign direct investment and income inequality: Further evidence," World Development, Elsevier, vol. 23(3), pages 469-483, March.
- James Y. Yao & Calvin A. McDonald, 2003. "Mauritius; Unemployment and the Role of Institutions," IMF Working Papers 03/211, International Monetary Fund.
- Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, vol. 89(1), pages 78-102, March.
- Adams, Samuel, 2008. "Globalization and income inequality: Implications for intellectual property rights," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 725-735.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:48765. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.