IMPACT OF ECONOMIC AND FINANCIAL OPENNESS ON DOMESTIC INEQUALITY IN DEVELOPING AND EMERGING COUNTRIES: A PANEL DATA STUDY OF 11 COUNTRIES FOR 1980-2016

Abdelhamid El Bouhadi, Driss Ouahid and Abdelkader Elkhider

Applied Econometrics and International Development, 2022, vol. 22, issue 2, 67-88

Abstract: This paper tackles the impact of economic and financial openness on income inequality. The analysis aims to explain the disparities in income distribution in 11 developping and emerging countries that have implemented reforms of financial liberalization and economic and commercial openness (Argentina, Chile, Cote d´Ivoire, Ecuador, Morocco, Pakistan, Paraguay, Peru, Romania, Turkey and Uruguay). Our task is to conduct an econometric study using SVAR estimation, in panel data, taking into account the structural breaks that affect the time series. The variables chosen are the Gini index (representing income inequality) explained by economic openness (globalization index and openness rate), financial openness (KOF financial globalization index and financial liberalization index), GDP growth, social justice index, corruption index, governance index. The econometric results of the previous studies dealing with domestic inequality indicate that financial liberalization has a negative impact on inequality.

Keywords: Openness policy; income disparity; Gini index; VAR model; panel data. (search for similar items in EconPapers)
JEL-codes: C33 F21 (search for similar items in EconPapers)
Date: 2022
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