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The impact of FDI on income inequality in Egypt

Author

Listed:
  • Hebatalla Rezk

    (Zagazig University)

  • Goma Amer

    (Zagazig University)

  • Nahla Fathi

    (Zagazig University)

  • Sizhong Sun

    (James Cook University)

Abstract

This study examines the impact of inward foreign direct investment (FDI) on income inequality in Egypt over the period from 1975 to 2017. We find that a one per cent increase in FDI inflows (as a percentage of gross fixed capital formation) results in 0. 0188 reduction of the Gini coefficient. The finding is robust to different specifications of the empirical model and potential endogeneity of FDI inflows. The negative impact of FDI inflows suggests that Egyptian policymakers shall continue and strengthen the open-door policy, which has the added benefit of improving income inequality.

Suggested Citation

  • Hebatalla Rezk & Goma Amer & Nahla Fathi & Sizhong Sun, 2022. "The impact of FDI on income inequality in Egypt," Economic Change and Restructuring, Springer, vol. 55(3), pages 2011-2030, August.
    • Handle: RePEc:kap:ecopln:v:55:y:2022:i:3:d:10.1007_s10644-021-09375-z
    DOI: 10.1007/s10644-021-09375-z
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    More about this item

    Keywords

    FDI; Income inequality; Globalisation; Egypt;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

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