Globalization and the Fiscal Autonomy of the State

Rao, Jyoti

doi:10.2139/ssrn.333746

Cited by 12 publications

(15 citation statements)

References 8 publications

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“…Capital mobility was represented by the capital account openness index in the manner of Lee and Jayadev (2003). For trade openness, two measures were considered: the ratio of trade taxes to trade sourced from the World Bank's World Development Indicators (WDI) 2 and the residual by regressing the trade share on GDP per capita and population (in log form), as in Rao (1998). The results were robust for developed countries, whereas there was no evidence of the bargaining channel in the developing counterparts.…”

Section: Globalization and Labor Share In Developing Countriesmentioning

confidence: 99%

Globalization and the Labor Share in National Income

Doan

Wan

2017

SSRN Journal

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Contradicting the conventional wisdom of constant factor shares, the portion of national income accruing to labor has been trending downward in the last three decades. This decline must have contributed to rising inequality as labor income is more evenly distributed than capital income. This study contributes to the literature on income inequality by exploring the role of globalization in driving the labor share. In particular, we focus on the impacts of trade openness and foreign direct investments (FDI) on the labor share. Using country-level panel data for 1980-2010, the study finds that trade is a significant and robust determinant of labor share. Generally speaking, export depresses while import increases the labor share. The impact of FDI, however, is insignificant. These results are similar for both developed and developing countries. Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication.ADB recognizes "China" as the People's Republic of China. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building, 8th Floor 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan AbstractContradicting the conventional wisdom of constant factor shares, the portion of national income accruing to labor has been trending downward in the last three decades. This decline must have contributed to rising inequality as labor income is more evenly distributed than capital income. This study contributes to the literature on income inequality by exploring the role of globalization in driving the labor share. In particular, we focus on the impacts of trade openness and foreign direct investments (FDI) on the labor share. Using country-level panel data for 1980-2010, the study finds that trade is a significant and robust determinant of labor share. Generally speaking, export depresses while import increases the labor share. The impact of FDI, however, is insignificant. These results are similar for both developed and developing countries.

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Section: Globalization and Labor Share In Developing Countriesmentioning

confidence: 99%

Globalization and the Labor Share in National Income

Doan

Wan

2017

SSRN Journal

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“…Data are all available in the China Trade and External Economic Statistical Yearbook and China Statistical Yearbook. Since the object of our analysis is restricted to China, and the results obtained are only appropriate for China, using trade volume to measure trade openness will not incur the problem suggested by Rao (1998).…”

Section: A Variables Selection and Data Sourcesmentioning

confidence: 99%

“…It is probably true that the impact of trade liberalisation on labour income share is sensitive to the size of the countries in question. As argued by Rao (1998), using the ratio of real trade amount over GDP to measure trade liberalisation has shortcomings: trade liberalisation indices constructed in this way 1 9 8 7 1 9 8 9 1 9 9 1 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 0 0 1 2 0 0 3 2 0 0 5 Year Percentage Labor Income Share Export Dependence Ratio…”

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confidence: 99%

Trade Liberalisation and Labour Income Share Variation: An Interpretation of China’s Deviation from the Stolper–Samuelson Theorem

Huang

Lü

2011

World Economy

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By constructing a two‐country, three‐commodity, three‐sector theoretical model, we show that trade liberalisation has double effects, i.e., ‘factor price effect’ and ‘technology progress effect’, on labour income share. China’s deviation from the Stolper–Samuelson Theorem is mainly due to the negative effect of technology progress, which weakens the positive pulling effect of trade liberalisation on labour income share. Based on the panel data of 29 provinces and cities in China dated from 1987 to 2006, we build up an empirical model. We find that because of the offsetting cancellation of opposite effects, the overall effect of trade liberalisation on labour income share is insignificant. However, when eliminating the negative effect of technology progress on labour income share, the effect of trade liberalisation becomes significantly positive. Moreover, the positive effect of trade liberalisation has become smaller in recent years. This is because of the transformation of export structure, which has led to a decrease in the positive effect of export on labour income share.

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“…Again the impact of this would differ greatly for different economies. These issues have been analysed in a number of papers (Roberts 2003, Bidani and Ravallion 1995, Rao 2001, Cornia and Court 2004and Charlton and Stiglitz 2004.…”

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confidence: 99%

A Study on Impact of FDI Flows on Poverty Reduction in India

Dhamija¹,

Singh²

2018

Prabandhan: Indian Journal of Management

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It is widely proclaimed that capital account liberalisation would immensely benefit developing economies because once capital controls are lifted capital would flow from the capital abundant rich countries to the capital scarce developing countries. This free movement of capital could possibly increase growth thereby lifting millions out of poverty. India has been gradually liberalising since the 1980s and throughout more capital inflows were observed compared to outflows. Also, the composition of capital flows has been changing since the 1980s -with foreign direct investment (FDI) inflows rising steadily post 1991compared to portfolio and debt flows. However, since 2000, FDI outflows from India have also been witnessed. In this discussion paper, we empirically test the impact of FDI flows on poverty in India for the period 1980-2011. To provide a perspective to India's performance we also analyse the link between FDI flows and poverty for SAARC countries. For a better understanding of how FDI flows impact poverty, we analyse the outflows and inflows separately. Interestingly, we find that in India FDI inflows contribute to increases in poverty whereas for other SAARC countries they significantly reduce poverty. The impact of FDI outflows in India too is in complete contrast with other SAARC countries. While FDI outflows significantly reduce poverty in India, they turn out to be insignificant for other regional countries.

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Globalization and the Fiscal Autonomy of the State

Cited by 12 publications

References 8 publications

Globalization and the Labor Share in National Income

Globalization and the Labor Share in National Income

Trade Liberalisation and Labour Income Share Variation: An Interpretation of China’s Deviation from the Stolper–Samuelson Theorem

A Study on Impact of FDI Flows on Poverty Reduction in India

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