Market imperfections, wealth inequality, and the distribution of trade gains

• 成果类型: Article
• 署名作者: Foellmi, Reto; Oechslin, Manuel
• 署名单位: University of Bern; Tilburg University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2010.03.001
• 发表日期: 2010
• 页码: 15-25
• 关键词: Wealth inequality; trade liberalization; Credit market frictions; Top incomes

摘要

Globalization increasingly involves less-developed countries (LDCs), i.e., economies which usually suffer from severe imperfections in their financial systems. Taking these imperfections seriously, we analyze how credit frictions affect the distributive impact of trade liberalizations. We find that free trade significantly widens income differences among firm owners in LDCs: While wealthy entrepreneurs are better off, relatively poor business people lose. Intuitively, with integrated markets, profit margins shrink which makes access to credit particularly difficult for the least-affluent agents. Richer entrepreneurs, by contrast, win because they can take advantage of new export opportunities. Our findings resonate well with a number of empirical regularities, in particular with the observation that some liberalizing LDCs have observed a surge in top-income shares. (C) 2010 Elsevier By. All rights reserved.