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Globalization and income inequality in developing countries: a GMM approach

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  • Carole Ibrahim

    (Saint Joseph University Dubai
    American University in Dubai)

Abstract

The purpose of this paper is to empirically examine the effect of overall globalization along its dimensions on income inequality in 66 developing countries for 1990–2017. This study makes use of the system generalized method of moments’ estimator to measure the effects of globalization on income inequality. The empirical results show that overall globalization reduces income inequality in the developing world. In addition, the findings reveal that economic and social globalization have a significantly negative effect on income inequality in developing countries, whereas political globalization does not have a significant impact. While existing studies focus on specific dimensions of globalization to study its effects on income inequality, this study analyzes the influence of overall globalization as well as the effects of the economic, social, and political dimensions on income inequality in developing nations. Moreover, this study uses a system generalized method of moments’ estimator to improve the consistency of the results.

Suggested Citation

  • Carole Ibrahim, 2022. "Globalization and income inequality in developing countries: a GMM approach," SN Business & Economics, Springer, vol. 2(8), pages 1-14, August.
    • Handle: RePEc:spr:snbeco:v:2:y:2022:i:8:d:10.1007_s43546-022-00280-9
    DOI: 10.1007/s43546-022-00280-9
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    More about this item

    Keywords

    Globalization; Income inequality; System GMM; Developing countries;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • F02 - International Economics - - General - - - International Economic Order and Integration

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