Structural change, trade, and inequality: Some cross-country evidence

Arbeitspapier

The process of transition from a low-income to a high-income country involves a structural transformation of the economy along with a change in the distribution of income and wealth in the economy. This study examines how this process of structural change impacts on inequality for a sample of advanced, emerging, and transition economies. Trade liberalization, through a reduction in tariff and removal of nontariff barriers, aids the process of structural transformation and simultaneously changes the income distribution in an economy. This study investigates whether structural change impacts inequality. Using a panel of 217 countries during the period 1991-2014 and the System GMM method of dynamic panel data analysis, it is found that the process of structural change increases income inequality, while trade liberalization and FDI inflows help to reduce it. Income distribution is found to be more equal to infrastructure development. The econometric results are robust and have important policy implications.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ADBI Working Paper ; No. 763

Classification and Topics

• Classification: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure ; Economic Growth and Aggregate Productivity: General ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Subject: inequality ; growth and structural change ; trade ; System GMM

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Roy, Rudra Prosad ; Roy, Saikat Sinha
• Event: Veröffentlichung
• (who): Asian Development Bank Institute (ADBI)
• (where): Tokyo
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/179219
• Last update: 10.03.2025, 11:41 AM CET