The standard Hecksher-Ohlin-Samuelson framework claimed that foreign trade benefits developing countries, but many empirical studies suggest otherwise. After analyzing data on income deciles from the World Income Distribution Database for 66 developing countries, we found that trade openness benefits underprivileged people in affluent countries but not in developing countries. Also, external financial flows and democracy in conjunction do not exert significant effects, suggesting that these variables might affect income distribution through different channels. Finally, we reinforce the Kuznets inverted-U hypothesis; namely, the presence of an economic development threshold beyond which low-income deciles would increase.


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    Title :

    How Can Globalization Affect Income Distribution? Evidence from Developing Countries


    Contributors:

    Published in:

    Publication date :

    2016




    Type of media :

    Article (Journal)


    Type of material :

    Print


    Language :

    English



    Classification :

    BKL:    83.71 Handel / 83.72 Verkehrswirtschaft
    Local classification FBW:    oek 3855