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Trade and income inequality in developing countries

Meschi, Elena and Vivarelli, Marco (2009) Trade and income inequality in developing countries. World Development, 37 (2). pp. 287-302. ISSN 0305-750X

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Abstract

We use a dynamic specification to estimate the impact of trade on within-country income inequality in a sample of 65 developing countries (DCs) over the 1980-1999 period. Our results suggest that trade with high income countries worsen income distribution in DCs, both through imports and exports. These findings provide support to the hypothesis that technological differentials and the skill biased nature of new technologies may be important factors in shaping the distributive effects of trade. Moreover, we observe that the previous results only hold for middle income countries (MICs); we interpret this evidence by considering the greater potential for technological upgrading in MICs.

Item Type: Article
Controlled Keywords: Quantitative analysis; globalization; within-country income distribution; technology transfer; developing , countries; LSDVC estimator.
Depositing User: IOE Repository Editor (1)
Date Deposited: 18 May 2010 06:39
Last Modified: 14 Oct 2013 12:10
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