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Impact of FDI on Income Distribution in Selected SAARC Countries

Author Affiliations
University of the Punjab
Year2014
Citations11

Abstract

This study analyzes the impact of inward foreign direct investment (FDI) on income distribution in five SAARC countries, namely, Bangladesh, India, Nepal, Pakistan and Sri Lanka using panel data from 1980 to 2011. Dependent variable is income inequality measured by Gini coefficient whereas independent variables are inward FDI stock as a percentage of GDP, trade openness (exports + imports / GDP), per capita GDP used as a proxy for economic growth and annual inflation rate measured by consumer price index (CPI). Fixed effects model has been used on the basis of Hausman. The results show that inward FDI stock has a negative and statistically significant impact on income inequality. Trade openness has a positive and statistically significant impact on income…
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