Foreign Direct Investment and Income Distribution: Evidence from Post-Communist New EU Member States. Issue 6 (1st November 2020)

• Record Type: Journal Article
• Authors: Josifidis, Kosta; Supic, Novica; Doroskov, Nikolina
• Is Part Of: Eastern European economics. Volume 58:Issue 6(2020)
• Page Start: 497
• Page End: 516
• Publication Date: 2020-11-01
• Subjects: foreign direct investment -- income distribution -- post-communist economies -- transition; D31 -- F21; Europe, Eastern -- Economic conditions -- Periodicals; 330.947
• DOI: 10.1080/00128775.2020.1762496
• Languages: English
• ISSNs: 0012-8775

Abstract

ABSTRACT: This article gives insight into the influence of FDI on income distribution in post-communist new EU member states. Using the method of seemingly unrelated regressions on panel data from 1990–2014, we find robust evidence of a nonlinear relationship between FDI and income distribution. The observed FDI effect varies by income shares. In the case of the bottom 50% income share, the impact of FDI on income concentration is homogeneous and negative; for the middle 40%, FDI first increases and then reduces its income share, whereas for the top 10% this effect is first negative and then positive.