Abstract:

Income imbalance is one of the most important economic and social problems in many developed and developing countries. When this problem is excessively growing, it can lead to internal conflicts in countries, many economic and political problems as well. In this study, the effects of foreign trade on income inequality were studied by panel data analysis methods, using data from 17 high and medium-income countries for the period 2000-2019. Three different econometric models were used for this purpose. The study first tested the stages of the series; Levin, Lin and Chu (2002) and Im, Pesaran and Shin (2003) panel unit root tests and found that all of the series were stages in the first difference. The existence of matching relationships between the series was tested with the Pedroni (2004) method and the series included in all models were found to be matched. Long-term and short-term analyses were performed using the Panel DOLS method. These analyses have found that export and trade outward transparency, in accordance with the bilateral employment theory, increased income inequality in these countries, and that imports have no statistically meaningful impact on income inequality. The existence of causal relationships between the series was analyzed by the method of Dumitrescu and Hurlin (2012). As a result of this test, exports and trade outdoors have a causal relationship to income inequality, but such a relationship to income inequality from imports has not been identified. In addition, from income inequality to export and trade outward clarity, there is also a causal relationship. There are also mutual causal relationships between export and import.

Keywords: