This paper is the first that disentangles the source of FDI flows based on economic development and its effects on income inequality in 23 OECD countries for the period 1985-2007. The main findings are that FDI originating from other OECD countries show a significant non-linear relationship with inequality. That is deteriorating the income distribution in the short run while this effect diminishes over time. No such statistical evidence has been found to conclude that FDI from emerging markets has an effect on inequality. In addition, trade liberalization and skill biased technological change seem to be profound predictors of an increasing wage gap.

Emami Namini, J.
hdl.handle.net/2105/16310
Business Economics
Erasmus School of Economics

Heteren, S. van. (2014, July 24). Disentangling the Source of Inward FDI Flows and Its Effects on Inequality: A Panel of OECD Countries.. Business Economics. Retrieved from http://hdl.handle.net/2105/16310