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Does foreign direct investment affect domestic income inequality?

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  • Changkyu Choi

Abstract

Using pooled Gini coefficient 1993 to 2002 data for 119 countries from World Development Indicators 2004, World Bank, we find that income inequality, defined as the Gini coefficient, increases as FDI stocks as a percentage of GDP increase. Increases in per capita GDP and real per capita GDP growth rate reduce income inequality in a country, whereas an increase in GDP deteriorates income distribution. Furthermore, Latin American and Caribbean countries proved to have a less equal income distribution.

Suggested Citation

  • Changkyu Choi, 2006. "Does foreign direct investment affect domestic income inequality?," Applied Economics Letters, Taylor & Francis Journals, vol. 13(12), pages 811-814.
    • Handle: RePEc:taf:apeclt:v:13:y:2006:i:12:p:811-814
    DOI: 10.1080/13504850500400637
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