Export diversification, specialisation and inequality: Evidence from Asian and Western countries

Abstract

This paper examines the dynamic effect of globalization at the disaggregated level of sectoral export diversification and manufacturing specialization on income inequality using a panel data set of 52 Asian and Western countries from 1988 to 2014. The paper uses dynamic panel data models applying the System Generalized Method of Moments (GMM) estimations that provide more accurate and better results than those obtained with static panel data models. The results suggest that there is no statistically significant relationship between manufacturing specialization and inequality while sectoral export diversification has been the driving force of inequality. For sub-groups of countries, higher sectoral export diversification increases inequality and higher manufacturing specialization decreases inequality in high-income Asian countries and European Union (EU) member states. Moreover, the study finds insignificant effects in low-income Asian countries and Anglo-Saxon countries.

Government Intervention, Institutional Quality, and Income Inequality: Evidence from Asia and the Pacific, 1988–2014

“…GDP per capita is likely to increase income inequality during the first stage of economic development but decrease it in the long run. According to Blancheton and Chhorn (2019), this result confirms the fact that there is a rising number of people joining the global middle-income class, thanks to an increase in the living standards of people in Asia and the Pacific, especially in India and the PRC, which together account for 36.4% of the global population. The global middle-income class is defined as follows: "[T]hose households with daily expenditures between $10 and $100 per person at PPP.…”

Is Export Diversification or Export Specialization Responsible for Economic Growth in BRICS Countries?

“…Similarly, Lee and Zhang (2019) find that whilst export diversification reduces GDP volatility for a group of 84 lower income countries, there is no evidence of export diversification causing economic growth gains. For Asian and EU countries, Blancheton and Chhorn (2018) find that high sectoral diversification in export trade increases inequality whilst high specialization in exporting manufacturing products reduces inequality. Some of the empirical literature further hypothesizes on a nonlinear, U-shaped (or inverted U-shaped) relationship between export diversification and growth.…”

The Impacts of Globalization on Inequality in the Post-COVID-19 World: Evidence From China

“…Therefore, we control for the potential effects of the secondary (SECIND) and tertiary (TERIND) industry sectors on income inequality. GDP and GRP per capita are routinely employed as a determinant of income inequality in cross-country [e.g., (14,55,56)] and China-focused studies [e.g., (10,13)]. Thus, we include the real GRP per capita (GRPPC) 7 explanatory variable in the model of regional inequality.…”