UNIVERSITY OF ECONOMICS AND BUSINESS Faculty of Political Economics THE IMPACT OF ECONOMIC GLOBALIZATION ON INCOME INEQUALITY IN MIDDLE-INCOME COUNTRIES IN ASIA: AN EMPIRICAL ANALYSIS FROM 2018 TO 2021 RESEARCH SUPERVISOR: Dr. Pham Thi Linh STUDENT RESEARCHER: Tran Bao Chau CLASS: QH- 2019 E KT CLC 3 PROGRAM: Formal University Hanoi- 5/2023 UNIVERSITY OF ECONOMICS AND BUSINESS GRADUATION THESIS THE IMPACT OF ECONOMIC GLOBALIZATION ON INCOME INEQUALITY IN MIDDLE-INCOME COUNTRIES IN ASIA: AN EMPIRICAL ANALYSIS FROM 2018 TO 2021 RESEARCH SUPERVISOR: Dr. Pham Thi Linh THESIS OPPONENT: Dr. Nguyen Tuan Son STUDENT RESEARCHER: Tran Bao Chau CLASS: QH- 2019 E KT CLC 3 PROGRAM: Formal University Hanoi- 5/2023 COMMITMENT I hereby certify that my graduation thesis is the result of my own research under the direct guidance of Dr.
Pham Thi Linh. The research results are original and have not been copied from any other sources. I conducted the research by myself, including reading, translating, synthesizing, and implementing the materials. The theoretical content in my thesis includes some references, which are presented in the reference section.
The data, software programs, and results in my thesis are honest and have not been published in any other works. Hanoi, May 9", 2023 Author Chau Tran Bao Chau ACKNOWLEDGMENTS The graduation thesis on the topic “The impact of economic globalization on income inequality in middle-income countries in Asia: An empirical analysis from 2018 to 2021” is the result of my continuous efforts and the wholehearted support and encouragement of my teachers, friends, and family. I would like to express my sincere gratitude to those who have helped me during the completion of this research paper. First and foremost, I would like to extend my deepest appreciation and thanks to Dr.
Pham Thi Linh, who provided me with direct and dedicated guidance as well as significant contributions to my work. Iam grateful to Master Ho Bao Lam, who provided guidance, support, and essential data and models for this research. Moreover, I would also like to thank Master Nguyen Thanh Binh, my senior and teacher who has supported me since my first year of university, for providing valuable feedback and sharing his experiences to help me revise and improve my thesis. Finally, I would like to express my sincere gratitude to the VNU University of Economics and Business, especially to the faculty of Political Economy, who provided me with the necessary scientific information and helped me accumulate knowledge in the field to apply to this graduation thesis.
I am deeply grateful for all their contributions and support! TABLE OF CONTENTS LIST OF TABLES. 5 CHAPTERI- LITERATURE REVIEW AND THEORETICAL BASIS ON THE IMPACT OF ECONOMIC GLOBALIZATION ON INCOME INEQUALITY. Empirical studies on the impact of economic globalization on income inequality in middle-income Countries iN ASIA. Empirical studies on income I1nequaÏIfy.
Empirical studies on the impact of economic globalization on income v01 0. Empirical studies gaps. Theoretical frameworks on the relationship between economic globalization and INCOME INCQUALILY Ẽ0000n. Income InequaÌIVy.
The relationship between economic globalization and income H201). 25 CHAPTER 2- DATA AND METHODOLOOY. Data sources and Var1ablle$.- --- -«- + + + xxx vn ng nghiệt 31 2. The method of measuring income inequality.
_ The method of measuring economic globalization. 33 CHAPTER 3- RESULTS AND RECOMMENDATIONS. Descriptive research r€SUÏ(S. Quantitative research results.
5 <6 xxx x1 vn nh TH TH nh nu HH 46 3. -- --- «+ 11119 1 vn nh ng nhờ 51 3. Increase national technology capablÌIty. Promote education and skills development.
Encourage financial InCÏUSIOIA. Prioritizing fair and inclusive trade policies .Ă LH HH HH TH HH ng ệt 58 LIST OF TABLES Table 2. Explain the variable used in the REM model. The table shows the details of the trade index of 28 middle-income countries in the period Of 2018-2021.
The table shows the Palma index of 28 middle- income countries in Asia from "001. Random Effects Model .v nh ng rướt 43 Table 3. Multicollinearity test T€SUÏ(L.- c5 111112111911 2v vn ng ng tr 46 Table 3. Test of Hausman to select between REM and FEM models.
OLS random effect regression T€SUÏ(. The data used for anaÌÏyS1S. - - --- - c 13113311189 11 119 11118 11 19 1 ng nếp 58 LIST OF FIGURES Figure 3. The average growth rate of trade of 28 countries within the scope of the study divided into 5 Asian regions from 2018 to 2021.
The average FDI growth rate during the period from 2018 to 2021 of 28 countries in the studied region divided into 5 regions Of ÁS1a. Rationale Economic globalization refers to the increasing interconnectedness and integration of national economies by moving goods, services, capital, and people across borders. While it has brought many benefits, such as increased trade, investment, and technological progress, economic globalization has also been associated with growing income inequality within and across countries. In Asia, economic globalization has been a significant force since the 1990s, when many countries in the region opened their economies to trade and investment.
This has led to increased economic growth and poverty reduction in some countries, such as China and Vietnam, but it has also resulted in rising income inequality in many others, such as India, Indonesia, and the Philippines. One reason for this is that economic globalization has favored certain industries and sectors that are more competitive in the global market, such as high-skilled manufacturing and services, while leaving behind others that are less competitive, such as low-skilled labor-intensive industries. This has led to a shift in demand for labor, with a growing demand for high-skilled workers and a declining demand for low-skilled workers, leading to widening wage gaps and income inequality. Moreover, economic globalization has also contributed to the emergence of a global elite who benefit from the increased mobility of capital and the ability to exploit differences in labor and environmental regulations across countries.
This has resulted in a concentration of wealth and power among a small group of individuals and corporations, leading to further exacerbation of income inequality. The debate on the relationship between economic globalization and income inequality has become increasingly relevant in recent years, as income inequality has risen in many countries, including in Asia. Income inequality can have negative effects on economic growth, social cohesion, and political stability, and can lead to poverty, social unrest, and conflicts. Therefore, understanding the impact of economic globalization on income inequality is essential for policymakers, business leaders, and other stakeholders to develop strategies to promote inclusive and sustainable economic growth in middle-income countries in Asia.
That is the reason why I chose the topic “The impact of economic globalization on income inequality in middle-income countries in Asia: An empirical analysis from 2018 to 2021”. Research purpose The research purpose of “The impact of economic globalization on income inequality in middle-income countries in Asia: An empirical analysis from 2018 to 2021” is to investigate the relationship between economic globalization and income inequality in Asia during the specified period. The research aims to contribute to the academic and policy debates on the impact of globalization on income inequality and to identify effective policy measures that can help mitigate the negative effects of globalization on income distribution in Asian countries. Ultimately, the research purpose is to provide insights and recommendations that can help policymakers, academics, and other stakeholders better understand the complex relationship between economic globalization and income inequality and identify strategies for promoting more equitable economic growth and development in Asia.
Research questions and objectives The graduation thesis aims to answer the following issues: 1) What is the relationship between economic globalization and income inequality in Asian countries during the period of 2018 to 2021? 2) And how do various indicators of economic globalization affect income inequality in these countries? The objectives of this research could include: 1) To examine the relationship between economic globalization and income inequality in Asian countries during the period of 2018 to 2021, using various indicators of economic globalization. 2) To identify the extent to which economic globalization has contributed to income inequality in Asia and to analyze the factors that have influenced this relationship. Scope of the research The scope of the research includes analyzing the impact of economic globalization on income inequality in Asian countries during the specified period. The study will cover various indicators of economic globalization.
It also focuses on developing Asian countries, to provide a comprehensive analysis of the relationship between economic globalization and income inequality in the region. The research will also consider the different factors that may influence the impact of economic globalization on income inequality, such as differences in economic development, political systems, and institutional frameworks. The study will use a range of data sources and analytical tools to investigate the relationship between economic globalization and income inequality in Asia and identify policy implications for managing the potential negative impacts of globalization on income distribution. In terms of the time scope, the author chose the time period for the following reasons: Firstly, it is important to ensure the relevance of the chosen time period.
The selected time frame should be recent enough to capture the current economic and global conditions accurately. Analyzing data from 2018 to 2021 guarantees that the study reflects the most up-to-date information available. Given the rapid changes in economic and global conditions, utilizing outdated data may not accurately represent the current situation. Secondly, the chosen time period should be sufficiently long to provide an adequate sample size for analysis.
A three-year period (2018- 2021) allows for a substantial number of observations to be included in the study, thereby enhancing the statistical robustness of the analysis. Thirdly, the availability of data is a crucial consideration. Since this research relies on data from sources such as the World Bank and IMF, the author opted for this time period to access the most reliable and comprehensive data. By selecting a recent time period, there is a higher likelihood of obtaining relevant and accurate data, as statistical agencies and international organizations often release data with a time lag.
Choosing a more recent time period increases the chances of having access to the necessary data sources. During this time period, which includes the period just before the outbreak of the COVID-19 pandemic and the period during which the pandemic surged and dominated, there are some notable characteristics. This characteristic is relevant because the pandemic has had significant global economic repercussions, including its impact on income inequality. Ending the analysis in 2021 allows the study to focus on the pre- pandemic effects of economic globalization on income inequality, establishing a baseline for future research to assess the pandemic's influence.
Research significance The research on the impact of economic globalization on income inequality in Asian countries from 2018 to 2021 is significant for several reasons. Firstly, studying this relationship in Asia can provide important insights into how economic globalization affects income distribution and economic development in different contexts. Secondly, income inequality has become a pressing issue in many Asian countries, making it crucial for policymakers to understand the impact of economic globalization. Thirdly, the COVID-19 pandemic has exposed the vulnerability of many Asian economies to external shocks, highlighting the need for effective policies to manage the effects of economic globalization on income distribution.
Lastly, the research can contribute to the development of effective policy measures to manage the negative consequences of globalization on income inequality in Asia and provide insights for other regions facing similar challenges. Research structure The research consists of three main chapters: Chapter 1- Literature review of research and theoretical basis on the impact of economic globalization on income inequality Chapter 2- Data and Methodology Chapter 3- Results and Recommendations 10 CHAPTER 1- LITERATURE REVIEW AND THEORETICAL BASIS ON THE IMPACT OF ECONOMIC GLOBALIZATION ON INCOME INEQUALITY 1. Empirical studies on the impact of economic globalization on income inequality in middle-income countries in Asia 1.