The Effects of Globalisation on OECD Income Inequality: A static and dynamic analysis

Using the World Income Inequality Database and a static and dynamic panel data analysis, this paper analyses the correlation between income inequality in the OECD countries and economic globalization, measured by trade openness and foreign direct investment, for the period 1995-2007. The static analysis, conducted by means of the fixed-effects estimator, suggests that trade openness reduces inequality, whereas FDI is positively linked to inequality. Some control variables, such as unemployment and inflation, also have a positive effect on inequality. When we control for endogeneity, using the system GMM estimator with the Windmeijer correction for small samples, the results also show that trade openness decreases income inequality and that the FDI effect on inequality is not significant. The country’s economic growth causes inequality to increase, according to the findings of both our static and dynamic analyses.Globalisation, Income inequality, Panel data. Classification-C23; D30; D63; F02.

Intra-industry trade and revealed comparative advantage : an inverted-U relationship

This paper investigates the relationship between all types of intra-industry trade (IIT) and comparative advantage. The paper finds strong evidence of an inverted-U relationship.The results also suggest that relative autarky costs is a common determinant for any type of IIT, which contradicts the prediction made by theory for separating the determinants of horizontal and vertical IIT

Lottery Sales and Per-capita GDP: An Inverted U Relationship

The main purpose of this study is to test the hypothesis that the relationship between per-capita sales and per-capita GDP is given by an inverted U. The paper considers that lottery sales increase together with increases in GDP up to a point where a country has reached a level at which the GDP is high enough and lottery sales become an inferior good and as a result, start to decrease. As there are other determinants of the expenditure on lottery products, the paper introduces into the regression analysis other explanatory factors as control variables. The paper uses a cross-country regression, using 2004 data for 80 countries. The results confirm the hypothesis, in addition to yielding other interesting findings: countries with higher levels of education sell fewer lottery products; lottery sales increase together with increases in the male to female ratio.Gambling; Per-capita GDP; Gender ratio; Religion; Education.

The Portuguese intra-industry tradeand the labor market adjustment costs: The SAH Again

This paper provides an empirical test of the SAH (Smooth Adjustment Hypothesis) using data from Portugal. According to SAH, intra-industry trade leads to relatively lower adjustment costs in comparison to inter-industry trade. The paper tests the SAH by using a dynamic panel data analysis that takes into account lagged effects of changes in the MIIT (Marginal Intra-Industry Trade) index. The regressions use the absolute change in the total employment in a given industry as a proxy for trade adjustment costs. The main results imply that a higher MIIT leads to lower adjustment costs in the same year. More specifically, the coefficients of the MIIT index are negative and statistically significant in all regressions. These results provide support for the SAH. In addition, the coefficients of the lagged MIIT indicators (one or two period) are mostly positive but not significant throughout. These findings highlight the importance of lagged trade indicators in affecting labor reallocation outcomes and thus adjustment costs.Adjustment costs; dynamic panel data, labor market; marginal intraindustry trade, smooth adjustment hypothesis, Portugal.

Demand for Lottery Products: A Cross-Country Analysis

Varieties of lottery games are played regularly in more than half of the world’s countries. When considering the probability of winning a lottery jackpot, we have a sense of the illogicality in buying a lottery ticket. This begs the question, why do people buy lottery products? This paper investigates the socio-economic and demographic features that help to explain the behavioural trend of lottery product purchasing throughout the world. With a multivariate linear regression analysis, this study uses macroeconomic data and qualitative variables to explain the variation of a country’s per-capita lottery sales. Some very interesting results were obtained. For example, the higher a country’s level of education, percentage of males and Christians, the higher are the lottery sales. The relationship between lottery sales and per-capita GDP is an inverted U: lottery sales increase simultaneously with increases in per-capita GDP up to a point and then start to decrease. These results are of interest because they suggest a link between certain socio-economic and demographic characteristics and consumer behaviour and may give a boost to the use of these characteristics in consumer research.Gambling; Lotteries; Education; Religiosity; Culture; Cross-country.

Immigration and Trade in Portugal: A Static and Dynamic Panel Data Analysis

This article tests the relation between immigration and Portuguese bilateral trade, considering the fifteen European partners (EU15). Using a static and dynamic panel data analysis, the results show that the stock of immigrants has a positive effect on Portuguese exports, imports and bilateral intra-industry trade. These results suggest that immigration affects all types of trade in a positive way. The underlying assumption is that immigration contributes to decrease the costs of transactions, which in turn promotes all trade flows. The static and dynamic results do not confirm the hypothesis of a negative effect of immigration on Portuguese exports. In the static model, a 10% increase in immigration induces a 5.98 % increase in exports and a 5.55% increase in imports. The effect on the Portuguese trade balance is positive. However, the dynamic results for the export and import equations are more reliable, showing a smaller positive effect on exports. A 10% increase in bilateral immigration induces a 0.47% and 2.34% increase in exports and imports, respectively. Our findings also suggest that when immigrants to Portugal originate from a Latin partner-country, the effects on trade are stronger than in the case of immigrants from non-Latin countries. The study is based on an extended gravitational model, in order to incorporate the qualitative factors as control variables.intra-industry trade; immigration; gravity model; panel data; Portugal.

Effects of Immigration on Intra-Industry Trade: A logit analysis

This study estimates the effects of the immigration stock, as well as those of immigrants’ characteristics, such as having the same language as that of the host country and the level of qualification or entrepreneurship, on Portuguese intra-industry trade (IIT) by types, controlling for the effects of other socio-economic factors, like economic dimensions, price indexes and distance. In addition to the member-countries of the EU-27, the group of countries studied includes five African countries with Portuguese as their official language, known as the PALOPs, and the BRIC countries. Since indexes are fractional variables, the pseudo-likelihood Logit estimator was used on the panel data to obtain the empirical results. The study found that an increase of the immigrant stock will produce an increment in the trade indexes considered and this effect is enhanced if immigrants originate from a country where Portuguese is the official language, or if they are highly qualified, whereas immigrant entrepreneurs have no significant effec

Immigration-trade links : the impact of recent immigration on portuguese trade

This study analyzes Portuguese immigration during the period 1995-2006 and estimates the effects of an increase in the stock of immigrants and of the increased percentage of highly-skilled immigrants employed in manufacturing industry. Furthermore, the effects are estimated of immigrant entrepreneurs active in manufacturing industry on Portugal’s bilateral trade with 38 countries. The latter group includes, in addition to the member-countries of the EU27, five African countries with Portuguese as their official language, and known as PALOPs. In 2006, these two blocs combined accounted for 83% of Portugal’s trade in goods and 89% of its immigrant stock. Panel data is used to conduct an econometric analysis. The study finds that a 10% increase in the immigrant stock will produce the following effects on Portugal’s bilateral trade with these countries: an increase of 2.8% in exports, an increase of 2.66% in imports, an increase of 1.87% in IIT, an increase of 4.01% in HIIT and an increase of 1.48% in VIIT. In addition, we conclude that higher percentages both of highly skilled immigrant workers and immigrant employers in manufacturing industry have a positive effect on exports, IIT and VIIT

The effects of globalisation on OECD income inequality : a static and dynamic analysis

Using the World Income Inequality Database and a static and dynamic panel data analysis, this paper analyses the correlation between income inequality in the OECD countries and economic globalization, measured by trade openness and foreign direct investment, for the period 1995-2007. The static analysis, conducted by means of the fixed-effects estimator, suggests that trade openness reduces inequality, whereas FDI is positively linked to inequality. Some control variables, such as unemployment and inflation, also have a positive effect on inequality. When we control for endogeneity, using the system GMM estimator with the Windmeijer correction for small samples, the results also show that trade openness decreases income inequality and that the FDI effect on inequality is not significant. The country’s economic growth causes inequality to increase, according to the findings of both our static and dynamic analyses