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Inequality, Trade and Development: Evidence from Developing Countries

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  • Majeed, Dr. Muhammad Tariq

Abstract

This study analyzes the impact of trade on cross-country inequality using a panel data set from 65 developing counties over a long period 1970-2008. This study differs from the existing literature on distributional impact of trade by explicitly noting the importance of development stage in shaping the link. The analysis shows that the effect of trade on inequality depends upon the level of development of a trade integrating economy. Economies that have a high level of economic development acquire a favorable effect of trade while underdeveloped economies suffer from international economic integration. In sum, trade accentuates not ameliorate inequality in countries with low level of economic development.

Suggested Citation

  • Majeed, Dr. Muhammad Tariq, 2013. "Inequality, Trade and Development: Evidence from Developing Countries," MPRA Paper 50337, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:50337
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    File URL: https://mpra.ub.uni-muenchen.de/50337/1/MPRA_paper_50337.pdf
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    References listed on IDEAS

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    1. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January.
    2. Robbins, Donald J., 2003. "The impact of trade liberalization upon inequality in developing countries : a review of theory and evidence," ILO Working Papers 993650553402676, International Labour Organization.
    3. Muhammad Tariq MAJEED, 2010. "Inequality, Trade Openness And Economic Growth In Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(2).
    4. Donald Robbins, 2003. "The impact of trade liberalization upon inequality in developing countries - A review of theory and evidence-," DOCUMENTOS DE ECONOMÍA 003601, UNIVERSIDAD JAVERIANA - BOGOTÁ.
    5. Majeed, Muhammad Tariq & MacDonald, Ronald, 2010. "Corruption and the Military in Politics: Theory and Evidence from around the World," SIRE Discussion Papers 2010-91, Scottish Institute for Research in Economics (SIRE).
    6. MacDonald, Ronald & Majeed, Muhammad Tariq, 2010. "Distributional and Poverty Consequences of Globalization: A Dynamic Comparative Analysis for Developing Countries," SIRE Discussion Papers 2010-62, Scottish Institute for Research in Economics (SIRE).
    7. Majeed, M Tariq, 2011. "Trade, Poverty and Employment: Empirical Evidence from Pakistan," MPRA Paper 45077, University Library of Munich, Germany.
    8. Majeed, Muhammad Tariq & MacDonald, Ronald, 2011. "Corruption and Financial Intermediation in a Panel of Regions: Cross-Border Effects of Corruption," SIRE Discussion Papers 2011-67, Scottish Institute for Research in Economics (SIRE).
    9. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
    10. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1169-1213.
    11. Majeed, Dr. Muhammad Tariq, 2013. "Inequality, Financial Development and Government: Evidence from Low-Income Developing Countries," MPRA Paper 50296, University Library of Munich, Germany.
    12. Papanek, Gustav F. & Kyn, Oldrich, 1986. "The effect on income distribution of development, the growth rate and economic strategy," Journal of Development Economics, Elsevier, vol. 23(1), pages 55-65, September.
    13. repec:ilo:ilowps:365055 is not listed on IDEAS
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    Cited by:

    1. Bukhari, Mahnoor & Munir, Kashif, 2016. "Impact of Globalization on Income Inequality in Selected Asian Countries," MPRA Paper 74248, University Library of Munich, Germany.

    More about this item

    Keywords

    Trade; Development; Inequality; Developing Countries;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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