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Does Globalization Affect Top Income Inequality?, Rene Cabral, Rocio Garcia-Diaz, Andre V. Mollick
Does Globalization Affect Top Income Inequality?, Rene Cabral, Rocio Garcia-Diaz, Andre V. Mollick
Economics and Finance Faculty Publications and Presentations
We reexamine in this paper the role of globalization on top income shares (five classes from top 0.1% to top 10% of the income distribution) for a sample of 15 economies over the period 1970–2004. We investigate financial globalization measures that complement trade openness. Our system GMM (SGMM) estimations allow for a robust treatment of the endogeneity between income concentration and GDP per capita (as well as with taxation or government size). We find two interesting new results. First, the financial integration measure based on portfolio equity and FDI stocks (GEQ) turns out to have a large impact on top …