Trade and Income Inequality in Developing Countries

By E. Meschi, M. Vivarelli. 2009

397 citations recorded by the source corpus.

Summary We use a dynamic specification to estimate the impact of trade on within-country income inequality in a sample of 65 developing countries (DCs) over the 1980-99 period. Our results suggest that trade with high income countries worsen income distribution in DCs, through both imports and exports. These findings provide support to the hypothesis that technological differentials and the skill biased nature of new technologies may be important factors in shaping the distributive effects of trade. Moreover, we observe that the previous results only hold for middle-income countries (MICs); we interpret this evidence by considering the greater potential for technological upgrading in MICs.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/4a6b536107423a33370cdb11202673f49458f9d5

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In Economics and Econometrics

1. M. Vivarelli
2. Philipp Heimberger
3. Peter Nunnenkamp
4. Canh Phuc Nguyen
5. Thanh Dinh Su
6. Erol Taymaz
7. E. Meschi
8. P. Lassou

Citations in the corpus

• Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of Economic Literature (2014, background): “Meschi and Vivarelli (2009) analyze the impact of trade openness and technology transfer on income distribution in a panel of DCs.”
• Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature (2011, background): “…the developed world, implying that SBTC had been transferred rapidly from the developed world to middle-income countries, and emphasizing the pervasive nature of SBTC. Meschi and Vivarelli (2009) analyze the impact of trade openness and technology transfer on income distribution in a panel of DCs.”
• The Influence of Tourism on Income Inequality (2020, background): “On the same topics, Meschi and Vivarelli (2009) revealed that trade (proxied through imports and exports with HIEs) worsen income distribution in 65 developing countries over 1980–1999.”
• The effect of foreign aid on income inequality: Evidence from panel cointegration (2012, background): “Many of the more recent income inequality studies use the EHII Gini coefficient (Meschi and Vivarelli, 2009; Gimet and Lagoarde-Segot, 2011; Herzer and Vollmer, 2012).”
• Globalisation, accounting and developing countries (2017, background): “…to greater inequality (Cornia, 1999); poverty and unemployment increased (Stiglitz, 2002); trade with developed countries lowered incomes (Meschi & Vivarelli, 2009); local democracy was diminished; MNCs benefited e.g. sometimes by purchasing SOEs at low cost (Narula & Dunning, 2000);…”
• Trade, technology and skills: evidence from Turkish microdata (2011, background): “Instead, in developing countries the two processes are supposed to have opposite effects, as follows (for an extensive analysis, see Lee and Vivarelli, 2004 and 2006).”
• Does economic globalisation affect income inequality? A meta‐analysis (2020, background): “…while several papers find (partial) empirical support for the Stolper-Samuelson theorem (e.g. Robertson 2004; Chiquiar 2008; Roser and Crespo Cuaresma 2016), others reject it based on econometric hypothesis tests (e.g. Goldberg and Pavncik 2007; Meschi and Vivarelli 2009; Han et al. 2012).”