Skip to main content
Article thumbnail
Location of Repository

The social impact of globalisation in the developing countries

By Eddy Lee and Marco Vivarelli


In this paper an ex-post measurable definition of globalisation has been used, namely increasing trade openness and FDI. A general result is that the optimistic Heckscher-Ohlin/Stolper-Samuelson predictions do not apply, that is neither employment creation nor the decrease in within-country inequality are automatically assured by increasing trade and FDI.\ud \ud The other main findings of the paper are that:\ud \ud 1) The employment effect can be very diverse in different areas of the world, giving raise to concentration and marginalisation phenomena;\ud \ud 2) Increasing trade and FDI do not emerge as the main culprits of increasing within-country income innequality in DCs, although some evidence emerges that import of capital goods may imply an increase in innequality via skill-biased technological change;\ud \ud 3) Increasing trade seems to foster economic growth and absolute poverty alleviation, although some important counter-examples emerge

Topics: HG, JZ
Publisher: University of Warwick. Centre for the Study of Globalisation and Regionalisation
Year: 2006
OAI identifier:

Suggested articles


  1. (2001). A Future for Labor in the Global Economy,
  2. (1999). Adjusting to Trade Policy Reform, World Bank Working Paper doi
  3. (1998). Appropriate Technology and Growth, doi
  4. (2002). Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Budget Surveys, World Bank Policy Research Working Paper No. doi
  5. (1986). Catching-up, Forging Ahead and Falling Behind”, doi
  6. (1999). Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela, doi
  7. (1999). Economic Opening and the Demand for Skills in Developing Countries: A Review of Theory and Evidence, doi
  8. (1997). Employment and Wage Effects of Trade Liberalization: the Case of Mexican Manufacturing”, doi
  9. (1999). Employment Responses to International Liberalization in Chile”, doi
  10. (1999). Explaining Inequality the World Round: Cohort Size, Kuznets Curves, and Openness, NBER Working Paper no. 7224, National Bureau of Economic Research, doi
  11. (2001). External Liberalization, Economic Performance, and Social Policy, doi
  12. (1997). Foreign Direct Investment and Relative Wages: Evidence from Mexico’s Maquiladoras, doi
  13. (1999). Foreign Direct Investment, Licensing, and Incentives for Innovation, doi
  14. (1992). Foreign Investment and Technology Transfer: A Simple Model, doi
  15. (1996). Foreign Investment, Outsourcing, and Relative Wages, doi
  16. (1996). Globalization and Employment: Is Anxiety Justified?”,
  17. (2002). Globalization and Employment: The Impact of Trade on Employment Level and Structure in the Philippines”, Discussion
  18. (2002). Globalization and its Discontents, doi
  19. (2002). Globalization, Growth, and Poverty: Building an Inclusive World Economy, World Bank Policy Research Report, doi
  20. (2004). Globalization, Labour Markets and Social Outcomes in Developing Countries, doi
  21. (2004). Globalization, Skill-Biased Technological Change and Labour Demand, doi
  22. (2004). Globalization, Skills and Within Country Income Inequality in Developing Countries,
  23. (1997). Growth and Productivity: A Model of Cumulative Growth and Catching Up, doi
  24. (1996). HOS Hits Facts: Facts Win; Evidence on Trade and Wages in the Developing World, Development Discussion Paper no. 557,
  25. (1999). Income Distribution, Factor Endowments, and Trade Openness, doi
  26. (2004). International Strategy for Decent Work,
  27. (2003). Jobs and Incomes in a Globalizing World, International Labour Office, doi
  28. (2004). Labour Demand of Developing Countries in a Decade of Globalization: A Statistical Insight,
  29. (1994). North-South Trade, Employment and Inequality. Changing Fortunes in a Skill-Driven World, doi
  30. (2005). Openness, Economic Reforms, and Poverty: Globalization in the Developing Countries, doi
  31. (1997). Opennesss and Wage Inequality in Developing countries: The Latin American Challenge to East Asian Conventional Wisdom, The World Bank Economic Review, doi
  32. (1941). Protection and Real Wages, doi
  33. (2000). R&D and Technology Spillovers via FDI: Innovation and Absorptive Capacity, doi
  34. (1999). R&D Spillovers and Global Growth, doi
  35. (2002). Recent Developments in China’s Labor doi
  36. (1978). Relative Backwardness, Direct Foreign Investment and Transfer of Technology: A Simple Dynamic Model, doi
  37. (2000). Skill-biased Technology Transfer around the World, Oxford Review of Economic Policy, doi
  38. (2003). Structural Reforms, Technological Gaps and Economic Development: a Latin American Perspective”, doi
  39. (1995). Technological Paradigms, Patterns of Learning and Development: An Introductory Roadmap, doi
  40. (1998). The Asian Financial Crisis: The Challenge for Social Policy, International Labour Office, doi
  41. (2002). The Disturbing “Rise” of Global Income Inequality, NBER Working Paper No. 8904, National Bureau of Economic Research, doi
  42. (2004). The Employment Impact of Globalization in Developing Countries,
  43. (2003). The Impact of Technology Transfer on Employment and Income Distribution in Developing Countries: a Survey of Theoretical Models and Empirical doi
  44. (1994). The Labour Market and Trade Reform in Manufacturing”,
  45. (2002). The Least Developed Countries Report 2002: Escaping the Poverty Trap, United Nations, doi
  46. (2001). The Lost Decades: Developing Countries’ Stagnation in Spite of Policy Reforms 1980-1998”,
  47. (2002). The Ricardian Vice: Why Sala-i-Martin Calculations of World Income Inequality Cannot be Right, World Bank, Development Research Group,
  48. (2004). The Social Impact of Globalization: The Scope for National Policies,
  49. the Study of Globalisation and Regionalisation University of Warwick Coventry CV4 7AL, doi
  50. (2003). The Two Faces Of Globalization: Against Globalization as We Know it, doi
  51. (1989). Thinking about Growth, doi
  52. (2002). Trade and Poverty in the Poor Countries”, American Economic Review Papers and Proceedings, doi
  53. (1997). Trade and Technology from a Schumpeterian Perspective”, doi
  54. (2001). Trade in Capital Goods, doi
  55. (2002). Trade Liberalization and Employment: An Update of the Paper Presented at 282 nd
  56. (1996). Trade Liberalization and Income Distribution, NBER Working Paper no. 5693, National Bureau of Economic Research,
  57. (2000). Trade Liberalization and Manufacturing Employment, doi
  58. (2004). Trade Liberalization and Poverty: The Evidecne So Far, doi
  59. (2004). Trade Liberalization, Foreign Direct Investment and Income Inequality,
  60. (1999). Trade Policy and Economic Growth: a Skeptic's Guide to the Cross-national Evidence, doi
  61. (2005). Trade Policy at the Crossroads: The Recent Experience of Developing Countries,
  62. (2000). Trade, FDI, and International Technology Diffusion, doi
  63. (2004). Trade, Foreign Direct Investment and Employment: Some Empirical Evidence,
  64. (2001). Trade, Growth and Poverty, mimeo, Development Research Group, The World Bank, doi
  65. (2000). Trade, Trade Policy and Poverty: What Are the Links”, London, doi
  66. (1998). When Vintage Technology Makes Sense. Matching Imports to Skills, in Working Paper World Bank, n.1923, doi
  67. (1998). Why do New Technologies Complement Skills? Directed Technical Change and Wage Inequality, doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.