Relationship between globalization and poverty analysis

The authors have declared that no competing interests exist. Conceived and designed the experiments:

Relationship between globalization and poverty analysis

Journal of Globalization Studies. In addition two other indices of globalization, non-parametric Kearney and parametric principal component analysis are used as benchmarks to compare the results.

Relationship between globalization and poverty analysis

The proposed new index is decomposed into four sub-components. The index is also estimated in several forms separated by different economic growth variables and in decomposed or composite forms.

The main feature of this approach is that the estimation of globalization index and the examination of its relationship with economic development are conducted in one step.

All indices are compared in respect of their level, development and correlations.

Associated Data

The empirical analysis is based on a panel data consisting of 61 developed and developing countries observed during the period — Regression analysis is used to estimate the effects of globalization on income inequality.

To examine the sensitivity of the relationship between globalization and inequality, different inequality variables are employed.

It is expected that the indices serve as useful tools in comparing the globalization process among countries and the evaluation of the globalization effect on economic development and income inequality. This study is useful in the construction of a new multidimensional index of globalization with different and estimated weights attached to the determinant factors.

Introduction Globalization can be defined from various aspects not only in respect to economic activities, but also to political, technological, cultural interactions and taking into account many key factors such as standardization, transportation, communication, trading, migration, etc.

Globalization and Poverty

Through the process, economies become closer and more interrelated. As countries are speeding up their openness in recent years, there have been increasing concerns related to the globalization and its impacts on issues such as economic growth, poverty, inequality, regional differences, cultural dominance, environment, or economic integration.

Countries with large heterogeneity in the degree of globalization have shown different development patterns and results. The different degrees of development have become a source of inequality or poverty.

Thus, the link between economic growth, inequality, poverty and globalization has become the focus of attention of many researchers. Despite the increasing interests in the influence of globalization on economic growth and inequality, there are not many empirical studies examining the links between them.

The limited empirical evidence is a result of a lack of theoretical development, limited data and unsatisfactory measures of globalization. In recent years, several researchers have been developing methods of measurement of globalization to test the relationships mentioned.

The limited evidence also suggests contradictory views on the issue. For instance, some argue that globalization provides benefits by enhancing economic development and the reducing inequality of people with high economic opportunity, while others are against globalization due to its restricted beneficiaries.It is a qualitative study, which is based on conceptual analysis, theory building and “emic” perspective (authors' viewpoint).Findings – A relationship between current globalisation, unemployment, inequality and poverty should be investigated further.

In this research, the relationship between globalisation and poverty and income inequality is determined.

Articles from journals

A whole new globalisation index has been constructed based on data covering a. Does Globalization Harm the Poor? Is Globalization a Force for Poverty Alleviation, or a Driver of Inequality? Baylee Molloy April 4, While it has been challenging for economists to make a direct correlation between globalization and poverty reduction or increases/decreases in inequality.


The relationship between globalization and poverty is verified using regression models between poverty indicators (dependent variable) and the ratio of international trade (independent variable).

In the model, we add other interactive variables. The globalization index can be employed to quantify its impact on the difference in development or integration of countries, and the index can be used to study the causal relationship between globalization, income inequality and poverty.

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UNU-WIDER : Working Paper : The Relationship Between Income Inequality, Poverty, and Globalization