Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence

Marcel Neutel and Almas Heshmati ()

No 2223, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this research, the relationship between globalisation and poverty and income inequality is determined. A whole new globalisation index has been constructed based on data covering a large sample of 65 developing countries. The index is based on the globalisation index proposed by A.T. Kearney / Foreign Policy Magazine. The index is composed of four sub-indices, namely: economic integration, personal contacts, technological connections and political engagement. Results from cross-sectional regression analysis show that there is a significant relationship between globalisation and poverty and income inequality. Globalisation leads to poverty reduction and it reduces income inequality. The relationship between globalisation and poverty remains significant when controlled for regional heterogeneity. A non-linear analysis shows that poverty has diminishing returns to benefits from globalisation.

Keywords: globalisation; poverty; inequality; indices (search for similar items in EconPapers)
JEL-codes: C43 F15 O57 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2006-07
New Economics Papers: this item is included in nep-afr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published - published in: Vandana Sjajan (ed.), Globalization and Income Inequality, The ICFAI University Press: Hyderabad, 2010

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