Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Series Vol. 3 , 21 March 2023
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In recent years, trade globalization has experienced rapid growth, however, within many countries, income gap is also widening. Whether there exists causality needs further investigation. This work uses the panel of 166 countries during 1970-2018 and employs the exogeneous variation of trade globalization in the last period to explore its effect on income inequality. The paper finds trade globalization has a significantly positive effect on income inequality and it is robust when constructing instrument variables, considering long term effects or using changes in the regression. However, the effect varies in economies with different income and development levels, and technology, education, governance, policy and other factors may have important roles. Now, trade globalization is still a promising opportunity for all countries and each should develop discretionary policy to make the most of it.
Inequality, Trade Globalization, Stolper–Samuelson Theorem
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The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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