The Impact of Trade Openness on Regional Inequality: The Cases of India and Brazil

Marie Daumal
2013 The international trade journal  
Place du Maréchal de Lattre de Tassigny 75775 • Paris Cedex 16 •Tél. (33) 01 44 05 45 42 • Fax (33) 01 44 05 45 45 • 4, rue d'Enghien • 75010 Paris • Tél. Abstract Regional inequalities are large in India and Brazil and represent a development challenge. This paper aims to determine whether regional disparities are linked to countries' trade openness. An annual indicator of regional inequalities is constructed for India over the period 1980 and for Brazil over 1985 Results from time series
more » ... ssions show that Brazil's trade openness contributes to the reduction in regional inequalities in Brazil. The opposite result is found for India. India's trade openness is an important factor aggravating income inequality among Indian states. In both countries, the inflows of foreign direct investment are found to increase regional disparities.
doi:10.1080/08853908.2013.796839 fatcat:hprtf22yhbajfbzj6b6sae47bm