Globalization, decentralization and income inequality: The case of China

Jai S. Mah ()

Economic Modelling, 2013, vol. 31, issue C, 653-658

Abstract: The current study examines the effect of trade liberalization and expansion of foreign direct investment inflows, together with the pursuit of decentralization, on China's income inequality between 1985 and 2007. As the degrees of integration of the concerned variables are revealed to be different,Stock and Watson (1993) dynamic ordinary least squares method is employed to reveal the cointegrating relationship. The empirical evidence shows that trade liberalization has led to the higher income inequality, discrediting the Stolper–Samuelson theorem in international trade. There is mixed evidence relating to the effect of FDI inflows on income inequality. Decentralization is shown not to influence it.

Keywords: Globalization; Decentralization; Income inequality; China (search for similar items in EconPapers)
JEL-codes: D31 F13 F21 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:31:y:2013:i:c:p:653-658

DOI: 10.1016/j.econmod.2012.09.054

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