Temporal effects of Financial Globalization on Income Inequality

54 Pages Posted: 16 Jan 2020 Last revised: 9 Nov 2020

See all articles by Haris Khan

Haris Khan

SDSB, Lahore University Of Maangement Sciences; Department of Economics, Information Technology University

Choudhry Tanveer Shehzad

SDSB, Lahore University of Managment Sciences

Ferhana Ahmad

Dr. Ferhana Ahmad

Date Written: December 24, 2019

Abstract

Through parametric accelerated failure time survival analysis on a panel of 120 countries for 1970-2018, the study finds empirical evidence that time to upsurge in income inequality declines after a country liberalizes investment across borders. This occurs with a significant non-monotonic hazard rate of upsurge, arguably via the channels of capital-skill complementarity and wage inequality. This effect is robust to distributional assumptions, alternative measurements of financial globalization and income inequality, sample restriction to pre-crisis period and residual heteroskedasticity. Moreover, it is reasonably generalizable across different economic arrangements due to employing diverse panel and handling issues of imputation and cross-country standardization in contemporary income inequality data.

Keywords: Financial globalization, Income distribution, Survival analysis

JEL Classification: D31; E44; F02; G15; G18

Suggested Citation

Khan, Haris and Shehzad, Choudhry Tanveer and Ahmad, Ferhana, Temporal effects of Financial Globalization on Income Inequality (December 24, 2019). Available at SSRN: https://ssrn.com/abstract=3509061 or http://dx.doi.org/10.2139/ssrn.3509061

Haris Khan (Contact Author)

SDSB, Lahore University Of Maangement Sciences ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792
Pakistan

HOME PAGE: http://sdsb.lums.edu.pk/content/haris-khan

Department of Economics, Information Technology University ( email )

6th Floor، ARFA Tower, Ferozepur Road
Nishter Town, Lahore
Pakistan

Choudhry Tanveer Shehzad

SDSB, Lahore University of Managment Sciences ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792
Pakistan

Ferhana Ahmad

Dr. Ferhana Ahmad ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792
Pakistan

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