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Foreign direct investment and inequality in developing countries: Does sector matter?

Research output: Contribution to journalArticlepeer-review

41 Scopus citations

Abstract

Scholars have studied the relationship between inward foreign direct investment (FDI) and within-country income inequality in cross-national contexts, but have not empirically investigated how FDI in different sectors might affect inequality in different ways. We use error correction models to analyze sectoral FDI data compiled from UNCTAD investment reports in 60 middle-income countries from 1989 to 2010, arguing that FDI in services is more likely to be associated with inequality than FDI in other sectors. We argue that skill biases and changes in employment patterns associated with service sector investments can help explain these findings.

Original languageEnglish
Pages (from-to)209-236
Number of pages28
JournalEconomics and Politics
Volume29
Issue number3
DOIs
StatePublished - Nov 2017

UN SDGs

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

  1. SDG 10 - Reduced Inequalities
    SDG 10 Reduced Inequalities

Keywords

  • economic sectors
  • foreign direct investment
  • international political economy
  • macroeconomic political economy
  • wage/income inequality

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