Financial Development and the Fdi‐inequality Nexus

Lin, Shu; Kim, Dong Hyeon; Lee, Yi Huey

doi:10.1111/coep.12085

Cited by 9 publications

(3 citation statements)

References 70 publications

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“…Ordinary least squares regression, panel threshold regression and panel smooth transition regression Lin, Kim, and Lee (2015) The authors analysed the interaction between FDI and income inequality in 42 countries (period: 1976-2005).…”

Section: Generalized Least Squares Regressionmentioning

confidence: 99%

The impact of foreign direct investment on the economic development of emerging countries of the European Union

2021

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Starting from the premise that the impact of foreign direct investment (FDI) on the economies of the host countries is different from one economy to another, the aim is to evaluate the impact of a set of economic and social indicators on FDI and net income (% GDP-Gross Domestic Product) in emerging, ex-socialist countries of the European Union. Using econometric models, we analysed the relationship between the evolution of the net FDI inflows and a number of statistical indicators. Our findings proved that there are similarities between the countries analysed, in terms of the evolution of net FDI inflows, with some differences being recorded for Hungary, where the evolution of net FDI inflows has major fluctuations. We found that the countries present both similarities and differences in terms of variables that affect FDI. The FDI net inflows (% GDP) are in seven, out of nine economies, positively influenced by GDP, as it follows: Bulgaria, Lithuania and Slovenia are FDI attractive by an increasing GDP rate, while Latvia, Poland and Romania react to a better GDP per capita. Hungary is the only one that is positively influenced by both GDP rate and GDP per capita. Moreover, a decreasing corruption perception index, country risk rating, income tax (% of commercial profit) and other taxes paid by companies (% commercial profit) can positively influence the inflows of FDIs in some of the analysed countries.

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Section: Generalized Least Squares Regressionmentioning

confidence: 99%

The impact of foreign direct investment on the economic development of emerging countries of the European Union

2021

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“…Ucal et al (2016) used the nonlinear auto-regressive distributed lag (ARDL) modelling approach to examine annual Turkish data from 1970 to 2008 and documented that FDI can lower the level of income inequality in both short- and long-terms, but the effect is limited. However, some countries witnessed a positive influence of FDI on income inequality (Lai, 2011; Herzer et al, 2014; Lin et al, 2015; Asteriou et al, 2014). In terms of China, Lai (2011) applied ordinary least-squares (OLS) to examine the micro-level effect of foreign investment firms on domestic wage inequality.…”

Section: Literature Reviewmentioning

confidence: 99%

Does Internet development affect urban-rural income gap in China? An empirical investigation at provincial level

Wang

Yin

Pang

et al. 2021

Information Development

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This study aims to examine the impact of Internet development on the urban-rural income gap in China. By using a provincial level panel dataset comprising 31 of China’s provinces, it analyzes and compares the effects of the eastern, central, and western regions over the period of 2005–2016. The results show that Internet development aggravates the gap in the central region much more than that in the eastern and western regions. The trade openness expands the urban-rural income gap only in the eastern region. Urbanization reduces the urban-rural income gap in the western region more than that in the eastern and central regions. Additionally, the regional economic development level also reduces the urban-rural income gap in central region more than that in the eastern region. FDI reduces the urban-rural income gap only in the central region. Additionally, while the urban-rural income gap can widen further by Internet development with trade openness, it can be decreased if Internet development is combined with FDI and urbanization. To reduce urban-rural income gap, the government should accelerate the construction of Internet according to regional differences.

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“…However, this effect diminished with further expansions of FDI inflow. Lin et al (2015) explored the role of financial development in moderating the effect of FDI on income inequality in 42 developing and developed countries over the period 1976-2006, by employing a panel smooth transition regression technique. They found a positive impact of FDI on income inequality, which became stronger as a country's financial development improves.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of FDI on income inequality in Egypt

Rezk

Amer

Fathi

et al. 2022

Econ Change Restruct

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This study examines the impact of inward foreign direct investment (FDI) on income inequality in Egypt over the period from 1975 to 2017. We find that a one per cent increase in FDI inflows (as a percentage of gross fixed capital formation) results in 0. 0188 reduction of the Gini coefficient. The finding is robust to different specifications of the empirical model and potential endogeneity of FDI inflows. The negative impact of FDI inflows suggests that Egyptian policymakers shall continue and strengthen the open-door policy, which has the added benefit of improving income inequality.

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Financial Development and the Fdi‐inequality Nexus

Cited by 9 publications

References 70 publications

The impact of foreign direct investment on the economic development of emerging countries of the European Union

The impact of foreign direct investment on the economic development of emerging countries of the European Union

Does Internet development affect urban-rural income gap in China? An empirical investigation at provincial level

The impact of FDI on income inequality in Egypt

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