Foreign Direct Investment and Income Distribution: Evidence from Post-Communist New EU Member States

Kosta Josifidis, Novica Supic and Nikolina Doroskov

Eastern European Economics, 2020, vol. 58, issue 6, 497-516

Abstract: This article gives insight into the influence of FDI on income distribution in post-communist new EU member states. Using the method of seemingly unrelated regressions on panel data from 1990–2014, we find robust evidence of a nonlinear relationship between FDI and income distribution. The observed FDI effect varies by income shares. In the case of the bottom 50% income share, the impact of FDI on income concentration is homogeneous and negative; for the middle 40%, FDI first increases and then reduces its income share, whereas for the top 10% this effect is first negative and then positive.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:mes:eaeuec:v:58:y:2020:i:6:p:497-516

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DOI: 10.1080/00128775.2020.1762496

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