FDI and Income Inequality—Evidence from Latin American Economies. Issue 4 (November 2014)

• Record Type: Journal Article
• Authors: Herzer, Dierk; Hühne, Philipp; Nunnenkamp, Peter
• Is Part Of: Review of development economics. Volume 18:Issue 4(2014:Nov.)
• Page Start: 778
• Page End: 793
• Publication Date: 2014-11
• Subjects: Economic development -- Periodicals; 330
• DOI: 10.1111/rode.12118
• Languages: English
• ISSNs: 1363-6669

Abstract

<abstract abstract-type="main"> <title>Abstract</title> <p>This paper analyzes whether foreign direct investment (FDI) has contributed to the wide income gaps in Latin America. Panel cointegration techniques as well as regression analysis are performed to assess the impact of inward FDI stocks on income inequality among households in Latin American host countries. The panel cointegration analysis typically reveals a significant and positive effect on income inequality. There is no evidence for reverse causality. The findings are fairly robust to the choice of different estimation methods, sample selection and the period of observation.</p> </abstract>