Foreign Direct Investment and Income Inequality revisited

Arbeitspapier

* This paper discusses the impact of FDI on income inequality. * The theoretical ways in which FDI might influence income inequality between countries as well as within a given country are discussed, with special attention also given to employment generation effects. * Revisiting previous research we show that significant effects of FDI are hard to find in more recent work, with older studies showing mixed results. * Re-estimating the prominent study of Tsai (1995) with newer data we augment it by allowing for FDI-influences on inequality by region, income level, and export focus. * We find no overall impact of FDI on inequality. Also region and income differentiated estimations show no country group-specific impacts of FDI. Only in the export focusdifferentiated estimations we find some evidence of an inequality increasing impact of FDI in countries primarily exporting primary goods (without fuel). * FDI thus do not have significant implications for income distribution in general.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Entwicklungsökonomische Diskussionsbeiträge ; No. 32

Classification and Topics

• Classification: Wirtschaft
• Subject: Direktinvestition ; Verteilungswirkung ; Einkommensverteilung ; Rohstoffressourcen ; Export ; Schätzung ; Entwicklungsländer

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hemmer, Hans-Rimbert ; Krüger, Ralf ; Seith, Jennifer
• Event: Veröffentlichung
• (who): Justus-Liebig-Universität Gießen, Professur für Volkswirtschaftslehre und Entwicklungsländerforschung
• (where): Gießen
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/22388
• Last update: 10.03.2025, 11:44 AM CET