Financial development and the fdi-inequality nexus

Shu Chin Lin; Dong Hyeon Kim; Yi Huey Lee

doi:10.1111/coep.12085

Financial development and the fdi-inequality nexus

Shu Chin Lin, Dong Hyeon Kim, Yi Huey Lee

Research output: Contribution to journal › Article › peer-review

10 Citations (Scopus)

Abstract

This article empirically investigates whether the link between foreign direct investment (FDI) and income inequality varies with financial development. Using a smooth transition regression model to a panel of developing and advanced countries over the period of 1976-2005, the results indicate that financial development indeed defines the relationship between FDI and inequality. FDI raises income inequality and the effect becomes stronger in magnitude with financial sophistication. The results also indicate a large variation in the FDI effect across countries and over time, contingent on financial development.

Original language	English
Pages (from-to)	513-534
Number of pages	22
Journal	Contemporary Economic Policy
Volume	33
Issue number	3
DOIs	https://doi.org/10.1111/coep.12085
Publication status	Published - 2015 Jul 1

Bibliographical note

Publisher Copyright:
© 2014 Western Economic Association International.

ASJC Scopus subject areas

Economics and Econometrics
General Business,Management and Accounting
Public Administration

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1111/coep.12085

Cite this

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AB - This article empirically investigates whether the link between foreign direct investment (FDI) and income inequality varies with financial development. Using a smooth transition regression model to a panel of developing and advanced countries over the period of 1976-2005, the results indicate that financial development indeed defines the relationship between FDI and inequality. FDI raises income inequality and the effect becomes stronger in magnitude with financial sophistication. The results also indicate a large variation in the FDI effect across countries and over time, contingent on financial development.

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Financial development and the fdi-inequality nexus

Abstract

Bibliographical note

ASJC Scopus subject areas

UN SDGs

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