Functional distribution of income as a determinant of importing behavior: An empirical analysis

Vinicius Cicero and Gilberto Lima

Structural Change and Economic Dynamics, 2023, vol. 65, issue C, 393-405

Abstract: We examine the dynamic impact of the functional distribution of income on the demand for imports in developed and developing countries. Drawing upon a motivating accounting structure suggesting a potentially causal effect of the functional distribution of income in an extended version of a standard import function, we find evidence that a fall in the wage share has a statistically significant positive (negative) impact on the volume of imports in developing (developed) countries and the entire sample of countries. Therefore, the neglect of such income distribution effects in import demand functions represents the omission of both an empirically relevant variable and a further theoretically significant structural channel through which the functional distribution of income affects output growth. A key implication is that the impact of the functional distribution of income on the demand for imports has to be considered in growth empirics based on either a binding balance-of-payments constraint in the Kaldor–Thirlwall tradition or a demand-led regime approach or a competitive real exchange rate.

Keywords: Functional distribution of income; Import demand; Aggregate demand regimes; Balance-of-payments-constrained growth (search for similar items in EconPapers)
JEL-codes: E25 F14 F43 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0954349X23000395
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Functional Distribution of Income as a Determinant of Importing Behavior: An Empirical Analysis (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:65:y:2023:i:c:p:393-405

DOI: 10.1016/j.strueco.2023.03.008

Access Statistics for this article

Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().