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Is All FDI Created Equal?: An Empirical Analysis of the Effect of Foreign Direct Investment and its Sectoral Destination on Income Inequality in Developing Countries

Thesis advisor: Robert G. Murphy / Income inequality is an issue of moral, ethical, and economic concern. Disparity in levels of wealth and income in developing countries prevents poor individuals from enjoying the same opportunities as their wealthier counterparts, and hinders the prospects for future development. FDI is one among several possible culprits responsible for increasing income inequality. As a representative of foreign control and influence in developing economies, some countries are wary of FDI. On the other hand, FDI brings the promise of jobs, technology spillovers, foreign exchange, and economic growth. Previous studies have explored the effects of FDI on income inequality in developing countries, but they have all relied on FDI data that does not distinguish between direct investment destined for the primary, secondary, and tertiary sectors. This study uses sectorally disaggregated FDI data for a sample of developing countries over the years 1990-2005 in an attempt to discern whether sector-specific features play a role in affecting domestic income inequality. While this study fails to find the FDI variables significant, it does find much support for other possible causes of income inequality, such as population growth rate and levels of urbanization within a country. / Thesis (BA) — Boston College, 2007. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: International Studies. / Discipline: College Honors Program.

Identiferoai:union.ndltd.org:BOSTON/oai:dlib.bc.edu:bc-ir_102147
Date January 2007
CreatorsBrennan, Kerry Jane
PublisherBoston College
Source SetsBoston College
LanguageEnglish
Detected LanguageEnglish
TypeText, thesis
Formatelectronic, application/pdf
RightsCopyright is held by the author, with all rights reserved, unless otherwise noted.

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