Temporal Effects of Financial Globalization on Income Inequality

54 Pages Posted: 16 Jan 2020 Last revised: 5 Mar 2020

See all articles by Haris Khan

Haris Khan

SDSB, Lahore University Of Maangement Sciences

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, Income inequality, Survival analysis

JEL Classification: D31, D63, E44, F02, G15, G18, G28, O11, O15, O16

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

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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