The difference between trade and foreign direct investment concerning their impact on host-country income inequality

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dc.contributor.advisorVaal de, Albert
dc.contributor.advisorBurzynska, K.
dc.contributor.authorAlst, Jeroen van
dc.date.issued2022-07-07
dc.description.abstractWith multiple countries facing the increase in income inequality, the importance of (reducing) income inequality becomes more important. Literature has identified multiple factors that cause income inequality – between high-skilled and low-skilled workers – to rise, including trade and foreign direct investment. The aim of this research is to determine the impact of trade and foreign direct investment concerning their impact on host-country income inequality. By differentiating between inter- and intra-industry trade and horizontal- and vertical foreign direct investment, this research investigates this hypothesized relationship in 17 OECD countries for the 2013-2019 period. Literature suggests that inter-industry and vertical foreign direct investment negatively impact host-country income inequality. However, the results suggest that there is no significant relationship between income inequality, trade and foreign direct investment. A robustness check using GINI-index as dependent variable suggests that vertical FDI is significantly related to income inequality when controlling for the effect of so-called ‘vertical’ trade. These robustness checks strengthen the need for future research, since these relationships may not remain unexplored because the robustness check suggests that vertical FDI seem to play a role in explaining income inequality.en_US
dc.identifier.urihttps://theses.ubn.ru.nl/handle/123456789/12846
dc.language.isoenen_US
dc.thesis.facultyFaculteit der Managementwetenschappenen_US
dc.thesis.specialisationInternational Economics & Businessen_US
dc.thesis.studyprogrammeMaster Economicsen_US
dc.thesis.typeMasteren_US
dc.titleThe difference between trade and foreign direct investment concerning their impact on host-country income inequalityen_US
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