A revisit to the relationship between globalization and income inequality: are levels of development really paramount?


Han V., Öcal O., Aslan A.

Quality & Quantity, pp.1-18, 2022 (Scopus)

  • Publication Type: Article / Article
  • Publication Date: 2022
  • Doi Number: 10.1007/s11135-022-01402-z
  • Journal Name: Quality & Quantity
  • Journal Indexes: Scopus, International Bibliography of Social Sciences, ABI/INFORM, Index Islamicus, Political Science Complete, Psycinfo, Social services abstracts, Sociological abstracts, Worldwide Political Science Abstracts
  • Page Numbers: pp.1-18
  • Kayseri University Affiliated: Yes

Abstract

Abstract The European Union is an important example of economic integration and regional cooperation. The expectation from the EU is to ensure a more equitable distribution of income among the members of the union. However, especially after 1980, inequality raises were seen within income groups and new members. It is aimed to determine the efects of the important determinants of globalization on the increasing inequality in the EU-28 countries by this study. The aim of this study is to determine the efects of important determinants of globalization on increasing income inequality in EU-28 countries. In the study, using data from 1995 to 2018, the relationship between globalization and income inequality was examined by panel quantile analysis method. The fndings of the analysis helped us to see the efect of inequality variables within the various degrees of inequalities. It is aimed to contribute to the literature with the panel quantile approach, which we applied by examining the possible efects at diferent levels of development with diferent quantiles. In our study, we found that both trade openness and stock market capitalization reduce poverty at all levels of development. While R&D expenditure has a positive efect on medium and high levels of inequality, FDI at low and medium levels of inequality has a lowering efect on inequality. Finally, the efect of economic growth on income distribution increases inequality in all quantiles except the 90th. However, this efect of economic growth diminishes as the level of inequality increases and the GDP has an equalizing efect in the highest inequality countries