Income Distribution, Factor Endowments, and Trade Openness

Available empirical evidence suggests that globalisation in recent years have had a significant positive impact on various sectors of most economies; however, significant evidence also exists suggesting that this economic process has also accentuated poverty and worsened income distribution in parts of some economies. This study examines the effects of foreign direct investment, trade openness and foreign remittance on income inequality in Ghana. The paper applied the vector error correction model in examining the effect of FDI inflow, foreign remittance and trade openness and income inequality in Ghana. The result indicates Foreign Remittance, FDI, Trade Openness and Gini index, are integrated of order one. Additionally, Johansen’s test for cointegration suggest a long-run relationship between the Gini coefficient (income distribution) and examined independent variables. The study also found out that foreign remittance has a significant negative relationship with Ghana’s income inequality and FDI inflows have no significant impact on Ghana’s income inequality.

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Globalization and comparative compositional inequality

Political Science Research and Methods ◽

10.1017/psrm.2019.25 ◽

2019 ◽

Vol 8 (3) ◽

pp. 509-525

Author(s):

Andrew Q. Philips ◽

Flávio D. S. Souza ◽

Guy D. Whitten

Keyword(s):

Income Distribution ◽

Driving Forces ◽

Factor Endowments ◽

Economic Output ◽

Compositional Approach ◽

Using Data ◽

Relative Gains ◽

Gains And Losses ◽

The Impact ◽

Relative Factor

AbstractGlobalization has been one of the biggest driving forces of the last half century. There has been substantial disagreement about the impact that increased international integration has on income inequality. Though most agree that globalization positively affects economic output, it is no surprise that it leads to relative winners and losers within nations. The question that remains is where in the income distribution are these relative gains and losses occurring? We offer a broader picture of globalization's effects on inequality by using a dynamic compositional approach to test the impact of globalization and relative factor endowments on the composition of income. Using data from four countries, we model the effects of globalization on quantiles of the income distribution. Our findings suggest that globalization has substantial (and divergent) effects across income strata, and that these effects differ across nations based on relative factor endowments.

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Pro-poor and inclusive growth in West Africa

African Journal of Economic and Management Studies ◽

10.1108/ajems-08-2021-0359 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Opeoluwa Adeniyi Adeosun ◽

Mosab I. Tabash

Keyword(s):

Income Distribution ◽

Poverty Reduction ◽

Dynamic Models ◽

Trade Openness ◽

Interactive Effects ◽

Inclusive Growth ◽

African Region ◽

Cross Sectional ◽

Poor Growth ◽

Content Type

PurposeThis paper focuses on three key metrics of poverty, income distribution and employment to ascertain the pro-poor and inclusive-growth position of the western African region. The roles of governance structures and their interactive effects are also accommodated to capture the peculiarity of the region.Design/methodology/approachThe paper employs fixed and dynamic models.FindingsEvidence suggests that growth is pro-poor, although virtually all governance indicators are sterile in stimulating poverty reduction. The authors observe that health and education spending coupled with trade-openness stimulate pro-poor growth potentials, whereas conflicts culminate the pervasiveness of poverty in the region. By empirically answering the question of how inclusive is economic growth through the lens of income-distribution and employment, the authors show that growth has been exclusive as per-capita-GDP growth rather dampens income shared by the poorest 20%. Also, it is observed that growth has not been inclusive as the jobless-growth argument remains valid while high inequality further exacerbates unemployment in the region. It is further shown that governance has been generally weak in propelling inclusive growth except where the institutional-component of governance stimulates inclusive growth through improvement in equality and labor employability.Originality/valueThe study jointly examines the metrics of poverty, income distribution and employment to ascertain growth pro-poorness and inclusivity which are key for the achievement of African-union (AU) agenda 2063. The study captures cross-sectional dependence among selected countries which previous studies ignored.

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Does Nominal Devaluation Improve Income Distribution? Evidence from Bangladesh

South Asian Survey ◽

10.1177/0971523114539586 ◽

2012 ◽

Vol 19 (1) ◽

pp. 61-77

Author(s):

Muhammad Shahbaz ◽

Mohammad Mafizur Rahman

Keyword(s):

Income Inequality ◽

Income Distribution ◽

Trade Openness ◽

Bounds Testing ◽

Correction Model ◽

Distributed Lag ◽

Long Run ◽

Short Run ◽

Auto Regressive ◽

The Impact

The article aims to investigate the impact of nominal devaluation on income distribution in Bangladesh both in short and long runs. In doing so, Auto Regressive Distributed Lag (ARDL) bounds testing has been employed for cointegration, and Error Correction Model (ECM) has been used for short-run dynamics. The empirical psychology has confirmed the existence of long-run relationship between the variables. Furthermore our estimated results reveal that nominal devaluation tends to decrease income inequality. Though economic growth appears to improve income distribution, non-linear link between both the variables, however, depicts Kuznets’ inverted-U curve (1955). Financial development causes further deterioration in income distribution. Trade openness contributes to income inequality as discussed in Leontief Paradox.

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Inflation, Growth, and Distribution Nexus in Post-Transition and Emerging Economies of South Asia

Economic Alternatives ◽

10.37075/ea.2020.3.02 ◽

2020 ◽

pp. 368-383

Keyword(s):

Income Distribution ◽

South Asia ◽

Emerging Economies ◽

Poverty Reduction ◽

Trade Openness ◽

Poverty Rate ◽

Global Market ◽

Agricultural Prices ◽

The Poor ◽

The Impact

This study investigates the impact of inflation on poverty and income distribution in five major economies in South Asia in the period 1986-2014. Inflation reduces the poverty rate and the poverty gap as the agricultural poor largely benefit from higher agricultural prices whereas the poorest quintile of the population who are landless farmers remain in a disadvantageous position. This raises the overall level of inequality in the economy despite poverty reduction. Trade openness is still not the engine of growth in South Asia - rather it has widened the poverty gap and aggravated inequality because the poor are not well integrated to the global market as compared to the well-off groups. As a result, there has been growing inequality across the region.

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Educational Gender Gap, Economic Growth and Income Distribution: An Empirical Study of the Interrelationship in Cameroon

International Journal of Economics and Finance ◽

10.5539/ijef.v9n3p168 ◽

2017 ◽

Vol 9 (3) ◽

pp. 168

Author(s):

Dobdinga C. Fonchamnyo ◽

Nubonyin Hilda Fokong

Keyword(s):

Economic Growth ◽

Income Inequality ◽

Income Distribution ◽

Gender Gap ◽

Time Series Data ◽

Labour Force ◽

Trade Openness ◽

Least Square ◽

Series Data ◽

Theil Index

This study aimed at investigating the interrelationship existing between educational gender gap, economic growth and income distribution in Cameroon using time series data from 1970 to 2014 obtained from the World Bank Development indicators and University of Texas inequality project. For estimation, the three stage least square regression technique was employed to estimate the parameters of the system of equations. The econometrics results showed that, educational gender gap had a positive and significant effect on economic growth, while increase in income inequality deters growth in Cameroon. The results also revealed that the theil index of income inequality negatively and significantly affect the educational gender gap, while the proportion of female teachers in the labour force and trade openness had a positive influence on the educational gender gap. Based on the findings, it is recommended that policymakers should focus on socio-economic policies apt to reduce educational gender gap and income inequality and at promoting economic growth.

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