Foreign direct investment and income inequality in Latin America: A sectoral analysis

Suanes, Macarena

doi:10.18356/13c68e36-en

Cited by 23 publications

(23 citation statements)

References 36 publications

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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%

Trade liberalization and wage inequality: Evidence from Chile

Murakami

2021

The Journal of International Trade & Economic Development

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This study analyzes the impacts of further tariff reductions resulting from the proliferation of regional trade agreements on wage inequality between skilled and unskilled workers in Chile in the 2000s. Thus, we use data on effective tariff rates instead of uniform most-favored-nation rates to measure trade liberalization. We match panel data on industry characteristics, including effective tariff rates, to pooled individual cross-section data from national household surveys at the industry level. We find that the reductions in effective tariffs on final goods increase industry wage premiums, thus suggesting that liberalization-induced productivity improvements lead to higher wages. However, considering the differential impacts on different skill groups, we find that the reductions significantly increase industry wage premiums only for skilled workers, thereby increasing wage inequality. Moreover, the impact is larger in skilled workers employed in large-sized firms. The results are robust to the inclusion of other industry characteristics, including input tariffs, the share of foreign-owned capital, and payments to foreign technology. The results are also robust to the inclusion of industry productivity, which is likely to affect the effective tariffs and industry wage premiums simultaneously, as well as control for the potential endogeneity of trade policy.

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Section: Trade Liberalization and Industry Skill Premiumssupporting

confidence: 89%

Trade liberalization and wage inequality: Evidence from Chile

Murakami

2021

The Journal of International Trade & Economic Development

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“…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%

Financial Globalization and Inequality

Eichengreen¹,

Csonto²,

El-Ganainy³

et al. 2021

IMF Working Papers

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We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact depends on the composition of capital flows, their interaction, and on broader economic and institutional conditions. A comprehensive set of policies – macroeconomic, financial and labor- and product-market specific – is important for facilitating wider sharing of the benefits of financial globalization.

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“…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%

Regional Economic Integration and Income Inequality in Selected ASEAN Countries

Ean¹,

Mansor²,

Ling³

2020

IJARBSS

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Widening income inequality in recent years has triggered an outpouring analysis and reflection on the causes of inequality. Economic cooperation demonstrated robust economic growth, reducing poverty but also accompanied by rising inequality. The income gap persists between ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, Thailand) and the ASEAN-3 (Cambodia, Laos, Vietnam) has become a prominent issue and policy debate. Hence, this study aims to investigate the relationship of regional economic integration and income inequality by adopting a balanced panel analysis for selected ASEAN countries from 2005 to 2018. Trade and financial integration was evaluated to investigate the influence on inequality. Empirical findings showed that trade integration is more effective than financial integration in improving income distribution. Export activities from the manufacturing and service sectors help ASEAN-5, while the agricultural and manufacturing sectors help ASEAN-3 in narrowing income distribution. Therefore, integration policies to improve inequality should not be universally implied on countries with diverse economics structures and varied development activities.

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Foreign direct investment and income inequality in Latin America: A sectoral analysis

Cited by 23 publications

References 36 publications

Trade liberalization and wage inequality: Evidence from Chile

Trade liberalization and wage inequality: Evidence from Chile

Financial Globalization and Inequality

Regional Economic Integration and Income Inequality in Selected ASEAN Countries

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