Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30062
Authors: 
Chintrakarn, Pandej
Herzer, Dierk
Nunnenkamp, Peter
Year of Publication: 
2010
Series/Report no.: 
Kiel Working Paper 1579
Abstract: 
This study employs state-level panel data to explore the relationship between inward foreign direct investment (FDI) and income inequality in the United States. Using panel cointegration techniques that allow for cross-sectional heterogeneity, cross-sectional dependence, and endogenous regressors, we find that the short-run effects of FDI on income inequality are insignificant or weakly significant and negative. In the long run, however, FDI exerts a significant and robust negative effect on income inequality in the United States. This result for the United States as a whole does not imply that FDI narrows income gaps in the long run in each individual state. There is considerable heterogeneity in the long-run effects of FDI on income inequality across states, with some states (21 out of 48 cases) exhibiting a positive relationship between FDI in income inequality.
Subjects: 
FDI
Inequality
Panel Cointegration
United States
JEL: 
F21
D31
C23
Document Type: 
Working Paper

Files in This Item:
File
Size
382.54 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.