THE IMPACT OF GLOBALIZATION ON INCOME INEQUALITY: EMPIRICAL EVIDENCE FROM CANADA AND INDIA

Baotai Wang and D Ajit

The IUP Journal of Applied Economics, 2006, vol. V, issue 6, 7-16

Abstract: This study investigates the impact of the recent economic globalization, which may be characterized by increasing international trade values and Foreign Direct Investment (FDI) flows, on income inequality in Canada and India. The Gini coefficient the conventional measure of income inequality is used for this empirical investigation and the investigation is conducted within the unit root and cointegration framework. The empirical results show that economic globalization has a clear impact on income inequality in both Canada and India. Specifically, trade liberalization has a favorable impact on inequalities in Canada, while it has an adverse one in India. FDI, on the other hand, also has an asymmetrical impact on income inequalities: it tends to worsen inequalities in Canada, while it ameliorates inequalities in India.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjae:v:05:y:2006:i:6:p:7-16

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