2016
DOI: 10.18356/13c68e36-en
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Foreign direct investment and income inequality in Latin America: A sectoral analysis

Abstract: This paper analyses the relationship between foreign direct investment (fdi) and income inequality in Latin America. In particular, it estimates the effect of fdi from a sectoral perspective, identifying three major sectors: the primary sector, manufacturing industry and services. Using a data panel for 13 economies in the 1980-2009 period, empirical evidence was found for a positive effect of fdi on income inequality in the service and manufacturing sectors. KEYWORDSForeign direct investment, equality, income… Show more

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Cited by 18 publications
(18 citation statements)
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“…The finding is consistent with recent empirical studies analyzing LACs, including Herzer et al (2014), Kristjanpoller and Contreras (2017), Murakami and Hamaguchi (2017), and Suanes (2016). By contrast, the coefficients of input tariffs and foreign technology, including their interactions with skilled dummies, are insignificant, thus suggesting that foreign technologies may not be skill-biased in this period in Chile.…”
Section: Trade Liberalization and Industry Skill Premiumssupporting
confidence: 89%
“…The finding is consistent with recent empirical studies analyzing LACs, including Herzer et al (2014), Kristjanpoller and Contreras (2017), Murakami and Hamaguchi (2017), and Suanes (2016). By contrast, the coefficients of input tariffs and foreign technology, including their interactions with skilled dummies, are insignificant, thus suggesting that foreign technologies may not be skill-biased in this period in Chile.…”
Section: Trade Liberalization and Industry Skill Premiumssupporting
confidence: 89%
“…22 Here it is important to differentiate between horizontal and vertical FDI. Horizontal FDI means that firms undertake the same activities at their foreign affiliates as 19 See, for example, Tsai (1995); Gopinath and Chen (2003); Te ; Te Velde and Morrissey (2003); Lee (2006); Basu and Guariglia (2007) Suanes (2016). Some, however, find mixed or even no such evidence.…”
Section: Foreign Direct Investmentmentioning
confidence: 99%
“…The highest contribution stems from FDI. Suanes (2016) based on the sample from Latin American showed that manufacturing and servicing sector worsen income inequality within the country from 1980 to 2009.…”
Section: Theories and Literature Reviewmentioning
confidence: 99%