Trade Globalization, Financial Globalization and Inequality Within South-East Europe and CIS Countries

Abstract

This paper contributes to the empirical literature by investigating trade globalization and financial globalization as channels of inequality within South-East Europe and the Commonwealth of Independent States (CIS) countries from 1992 to 2007. In addition, the paper uses KOF (2010) index to measure the overall impact of globalization on income inequality in South-East Europe and the CIS countries. To overcome the limitations of the least squares dummy variables (LSDV) model, Parks method is used. The paper has two results. The first result is that both trade globalization and financial globalization deepen the income inequality within South-East Europe and the CIS countries. The second result is that the overall impact of globalization have adverse effect on inequality within South-East Europe and CIS countries from 1992 to 2007. These results support the hypothesis that globalization widens the income inequality within countries.

The Nexus Between Financial Globalization and Income Inequality: The Case of Emerging Market Economies

“…The Granger causality running from financial globalization to income inequality is observed in many countries such as Chile, China, Colombia, Egypt, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, and Thailand, unlike the conventional wisdom. The results are consistent with Das and Mohapatra (2003), Lee (2006), Kai and Hamori(2009), Elmawazini et al (2013), Jaumotte et al (2013), Asteriou et al (2014), Kang-Kook (2014), Daisaka et al (2014), Bukhari and Munir (2016), Cabral et al (2016), De Haan andSturm (2017), Khan et al (2019), Furceri et al (2019), Akbakay and Barak (2020). The findings also indicate that the Granger causality running from income inequality to financial globalization is seen in Egypt, Iran, Malaysia, Philippines, and Thailand.…”

“…Furthermore, it deteriorates the equalizing impact of financial depth, though it helps to decrease income inequality. Elmawazini et al (2013) evidence that income inequality is deepened through trade and financial globalization for the South-Eastern Europe countries and Commonwealth of Independent States. Jaumotte et al (2013) indicate that there is an increase in fluence of financial globalization on income inequality for 51 countries.…”

“…,Elmawazini et al (2013),Jaumotte et al (2013),Asteriou et al (2014), Kang-Kook (2014),Daisaka et al (2014),Bukhari and Munir (2016),Cabral et al (2016), De Haan andSturm (2017),Khan et al (2019), Furceri et al (2019,Akbakay and Barak (2020).…”

Troika of Trade Openness, Poverty and Income Inequality: Empirical Evidence from Lower and Middle Income Countries

“…These countries should devise the policies that encourage all these three socioeconomic indicators to accelerate the economic growth. Elmawazini, Sharif, Manga, and Drucker (2013) empirically investigated the impact of trade and general globalization (combination of economic, social and political globalization) on income inequality in Commonwealth of Independent States (CIS) and South Europe. There were eight South Europe and CIS countries in the sample.…”

Does Quality of Business Environment Influence Foreign Direct Investment Inflows? A Case of Central European Countries.

“…The impact of globalization on economic conditions and growth of countries is examined in a number of studies, where the globalization is measured with Globalization Index published by KOF Swiss Economic Institute (e.g. Chang and Lee, 2011;Elmawazini et al 2013, Elsherif, 2016Gurgul and Lach, 2014).…”