NDLI: Foreign Direct Investment and Income Inequality in Southeast Asia: a Panel Unit Root and Panel Cointegration Analysis, 1990

Content Provider	Springer Nature Link
Author	Cho, Hyungsun Chloe Ramirez, Miguel D.
Copyright Year	2016
Abstract	This paper examines the relationship between foreign direct investment (FDI) and income distribution in the host country as measured by the Gini coefficient. After providing some background and reviewing the extant literature, it undertakes a panel unit root and cointegration analysis that tests whether FDI has a non-linear impact on income inequality in seven selected Southeast Asian countries over the period 1990 to 2013. The paper finds strong evidence for panel cointegration using the Pedroni Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests. Thus, it proceeds to utilize the group-mean fully modified ordinary least squares (FMOLS) procedure to generate long-run estimates that are unbiased and consistent. The FMOLS estimator is also extremely accurate even in panels with very heterogeneous serial correlation dynamics, fixed effects, and endogenous regressors. The results confirm the hypothesis that FDI inflows tend to raise income inequality in the short run but reduce it in the long run. In this study, the Gini index starts decreasing after FDI inflows as a percentage of GDP reaches 5.6. The fact that the Gini coefficient reaches its maximum at a relatively low level of FDI inflows suggests that sample countries are endowed with substantial absorptive capacity. In other words, they will shift into the new technological paradigm quickly, thus supporting pro-globalization claims that, on balance, FDI is more beneficial than harmful.
Starting Page	411
Ending Page	424
Page Count	14
File Format	PDF
ISSN	01974254
Journal	Atlantic Economic Journal
Volume Number	44
Issue Number	4
e-ISSN	15739678
Language	English
Publisher	Springer US
Publisher Date	2016-12-08
Publisher Place	New York
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models Economic Development: General Economywide Country Studies: Asia including Middle East Gini coefficient Foreign direct investment (FDI) Fully modified ordinary least squares (FMOLS) Panel unit roots Panel cointegration test Southeast Asian countries Economics Macroeconomics/Monetary Economics//Financial Economics Microeconomics International Economics Public Finance
Content Type	Text
Resource Type	Article
Subject	Economics, Econometrics and Finance

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

A Panel Unit Root and Panel Cointegration Test of the Complementarity Hypothesis in the Mexican Case: 1960–2001

Dynamic Linkages between FDI Inflows and Domestic Investment: A Panel Cointegration Approach

A panel unit root and panel cointegration test of the complementarity hypothesis in the Mexican case, 1960-2001

Corporate Valuation and Dividends: UK Evidence from Panel Unit Root and Cointegration Tests

Economic Infrastructure, Private Capital Formation, and FDI Inflows to Hungary: A Unit Root and Cointegration Analysis with Structural Breaks

Foreign Direct Investment Liberalization Between Canada and the USA: A CGE Investigation

A note on the estimation of long-run relationships in panel equations with cross-section linkages (Di Iorio, Francesca;Fachin, Stefano)

Do Financial and Institutional Variables Enhance the Impact of Remittances on Economic Growth in Latin America and the Caribbean? A Panel Cointegration Analysis

Export and FDI in Asian countries: panel causality analysis

Foreign Direct Investment and Income Inequality in Southeast Asia: a Panel Unit Root and Panel Cointegration Analysis, 1990–2013

Similar Documents

A Panel Unit Root and Panel Cointegration Test of the Complementarity Hypothesis in the Mexican Case: 1960–2001

Dynamic Linkages between FDI Inflows and Domestic Investment: A Panel Cointegration Approach

A panel unit root and panel cointegration test of the complementarity hypothesis in the Mexican case, 1960-2001

Corporate Valuation and Dividends: UK Evidence from Panel Unit Root and Cointegration Tests

Economic Infrastructure, Private Capital Formation, and FDI Inflows to Hungary: A Unit Root and Cointegration Analysis with Structural Breaks

Foreign Direct Investment Liberalization Between Canada and the USA: A CGE Investigation

A note on the estimation of long-run relationships in panel equations with cross-section linkages (Di Iorio, Francesca;Fachin, Stefano)

Do Financial and Institutional Variables Enhance the Impact of Remittances on Economic Growth in Latin America and the Caribbean? A Panel Cointegration Analysis

Export and FDI in Asian countries: panel causality analysis

Foreign Direct Investment and Income Inequality in Southeast Asia: a Panel Unit Root and Panel Cointegration Analysis, 1990–2013