Globalization and income distribution; case study of some developing and developed countries

Nowadays the role of globalization in income distribution is among the most important topics discussed among economists, and multiple theories have been proposed by proponents and opponents. Therefore, it seems essential to study and assess impacts of globalization on distribution of interests. This paper studies impacts of globalization, unemployment, inflation, economic growth, and expenses of government investments on income distribution (as index of assessing income inequality) in 17 countries, including nine developing and eight developed countries for the period of 2001 - 2010. To find out the details of the results, besides the two separate models for the developing and developed countries, the 17 selected countries were analyzed through a single model as well. To estimate impacts of the variables, Panel Cointegration Method using Ordinary Least Squares (OLS), Dynamic Ordinary Least Squares (DOLS), and Fully Modified Ordinary Least Squares ( FMOLS) were utilized. The results of the estimates revealed that composite index variables of globalization, economic growth, and expenses of government investment have significantly positive impact on income distribution status, while variables of inflation and unemployment have had significantly negative impact on both groups of the selected countries. On the other hand, susceptibility rate of income distribution status in developing countries from globalization index is higher than that of developed countries.