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Please use this identifier to cite or link to this item: http://hdl.handle.net/10400.5/3512

Title: The effects of globalisation on OECD income inequality : a static and dynamic analysis
Authors: Faustino, Horácio
Vali, Carim
Keywords: Globalisation
Income inequality
Panel data
Issue Date: 2011
Publisher: ISEG. Departamento de Economia
Citation: Faustino, Horácio, Carim Vali. 2011. "The effects of globalisation on OECD income inequality : a static and dynamic analysis". Instituto Superior de Economia e Gestão - ISEG/DE Working papers nº 12-2011/DE.
Series/Report no.: DE Working papers nº 12-2011/DE
Abstract: Using the World Income Inequality Database and a static and dynamic panel data analysis, this paper analyses the correlation between income inequality in the OECD countries and economic globalization, measured by trade openness and foreign direct investment, for the period 1995-2007. The static analysis, conducted by means of the fixed-effects estimator, suggests that trade openness reduces inequality, whereas FDI is positively linked to inequality. Some control variables, such as unemployment and inflation, also have a positive effect on inequality. When we control for endogeneity, using the system GMM estimator with the Windmeijer correction for small samples, the results also show that trade openness decreases income inequality and that the FDI effect on inequality is not significant. The country’s economic growth causes inequality to increase, according to the findings of both our static and dynamic analyses.
URI: http://hdl.handle.net/10400.5/3512
ISSN: 0874-4548
Appears in Collections:DE - Documentos de trabalho / Working Papers

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