Skip to content
Research Article Open access CC BY 4.0

The Dynamics of Economic Globalization and Income Inequality in Sub-Saharan African Countries: An Empirical Insight from Two Stage Least Square and Fixed Effect Approach

Sone Wang Elvis, Enongene Betrand Ewane

South Asian Journal of Social Studies and Economics · pp. 33–46 · Published 6 Apr 2023

10.9734/sajsse/2023/v18i2654

Abstract

Many empirical studies have examined the nexus between economic globalization and income inequality. However, findings are controversial, especially for developing countries, which require further investigation. This study, therefore, aims to examine the effect of economic globalization on income inequality using unbalance panel data in 19 Sub Saharan African countries (SSA) from 2000 – 2015.  Due to endogeneity problem and cross sectional dependence, the model was analyzed using a two-stage least square (2SLS) regression and the fixed effect model with Driscoll-Kraay standard errors regression respectively. The findings reveal that FDI, Trade openness, and ICT development are positive and significantly link to income inequality while remittances have a negative and significant effect. This is an indication that economic globalization indicators (FDI, Trade openness, ICT) have failed to bring a fairer income distribution in these countries while remittances have contributed to income distribution. On basis of this conclusion, policymakers should pursue policies, which will enhance a balanced development and improvement in the socioeconomic welfare of the population by improving measures of income distribution.

Economic globalization income inequality 2SLS SSA

References (75)

  1. 1 Testing for unit roots in heterogeneous panels [DOI]
  2. 2 Unit root tests in panel data: asymptotic and finite-sample properties [DOI]
  3. 3 Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data [DOI]
  4. 4 Protection and Real Wages [DOI]
  5. 5 Interregional and International Trade. [DOI]
  6. 6 Foreign Direct Investment and Economic Growth: An Increasingly Endogenous Relationship [DOI]
  7. 7 International Trade and the Equalisation of Factor Prices [DOI]
  8. 8 How Much Do Immigration and Trade Affect Labor Market Outcomes? [DOI]
  9. 9 Migration from rural areas of poor countries: The impact on rural productivity and income distribution [DOI]
  10. 10 Remittances and Inequality [DOI]
  11. 11 Inequality in Social Capital [DOI]
  12. 12 Do liberalization and globalization increase income inequality? [DOI]
  13. 13 The Evidence on Globalisation [DOI]
  14. 14 Trade and Income Inequality in Developing Countries [DOI]
  15. 15 Does Economic Growth Benefit the Masses? Growth, Dependence, and Welfare in the Third World [DOI]
  16. 16 Globalization and income inequality: A panel data econometric approach for the EU27 countries [DOI]
  17. 17 Openness and inequality in developing countries: A review of theory and recent evidence [DOI]
  18. 18 Remittances and Poverty in Migrants’ Home Areas: Evidence from the Philippines
  19. 19 INTERNATIONAL REMITTANCES AND INCOME INEQUALITY IN AFRICA
  20. 20 Inequality in developed countries and Latin America: coordinated, liberal and hierarchical systems [DOI]
  21. 21 Trade Liberalization and Wage Inequality: Evidence from India [DOI]
  22. 22 The State of African Cities 2018: The geography of African investment
  23. 23 Migrant Remittances and (Under)Development in Mexico [DOI]
  24. 24 Does economic globalisation affect income inequality? A meta‐analysis [DOI]
  25. 25 FDI and income inequality in Africa [DOI]
  26. 26 Does Tourism Reduce Poverty in Sub-Saharan African Countries? [DOI]
  27. 27 Do remittances improve income inequality? An instrumental variable quantile analysis of the Kenyan case [DOI]
  28. 28 Empirical Analysis of the Key Drivers of Income Inequality in West Africa [DOI]
  29. 29 Why is Income Inequality Increasing in the Developed World? [DOI]
  30. 30 External sector and income inequality in interdependent economies using a dynamic panel data approach [DOI]
  31. 31 Impact of Globalization on Income Distribution Inequality in 60 Countries [DOI]
  32. 32 The Effects of International Remittances on Poverty and Inequality in Ethiopia [DOI]
  33. 33 Globalization, Poverty, and Inequality in Latin America: Findings from Case Studies [DOI]
  34. 34 The effects of migration on poverty and inequality in rural Kosovo [DOI]
  35. 35 Impact of Economic Globalization on Income Inequality: Developed Economies vs Emerging Economies [DOI]
  36. 36 Can social spending cushion the inequality effect of globalization? [DOI]
  37. 37 Temporal variation in the relationship between environmental demands and well-being: a panel analysis of developed and less-developed countries [DOI]
  38. 38 Globalization, Income Inequality and Poverty: Theory and Empirics [DOI]
  39. 39 La connectivité, condition du développement pour l’Afrique?
  40. 40 Empirical Inspection of Broadband Growth Nexus: A Fixed Effect with Driscoll and Kraay Standard Errors Approach
  41. 41 The ‘Forgotten’ middle class: An analysis of the effects of globalisation [DOI]
  42. 42 Impact of Globalization on Income Distribution Inequality in 60 Countries: Comments [DOI]
  43. 43 General Diagnostic Tests for Cross Section Dependence in Panels [DOI]
  44. 44 Globalization, Outsourcing, and Wage Inequality [DOI]
  45. 45 A Simple Panel Unit Root Test in the Presence of Cross Section Dependence [DOI]
  46. 46 Does Globalization Make the World More Unequal? [DOI]
  47. 47 Globalization and Inequality: Evidence from Within China [DOI]
  48. 48 Centre d'Analyse Théorique et de Traitement des données économiques REMITTANCES, INEQUALITY AND POVERTY IN PAKISTAN: MACRO AND MICROECONOMIC EVIDENCE Mazhar MUGHAL
  49. 49 'To Have and Have Not': Migration, Remittances, Poverty and Inequality in Algeria [DOI]
  50. 50 Income Inequality Trends in sub-Saharan Africa Divergence, Determinants and Consequences: Introduction, Motivation and Overview [DOI]
  51. 51 Endogenous Growth Theory [DOI]
  52. 52 Testing Weak Cross-Sectional Dependence in Large Panels [DOI]
  53. 53 Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras [DOI]
  54. 54 Globalization and Its Discontents [DOI]
  55. 55 Rising Income Inequality: Technology, or Trade and Financial Globalization? [DOI]
  56. 56 How Trade Hurt Unskilled Workers [DOI]
  57. 57 European Journal of Political Economy [DOI]
  58. 58 Trade openness, FDI, and income inequality: Evidence from sub‐Saharan Africa [DOI]
  59. 59 The Influence of Tourism on Income Inequality [DOI]
  60. 60 Trade openness and income inequality: New empirical evidence [DOI]
  61. 61 The impact of tourism growth on income inequality: Evidence from developing and developed economies [DOI]
  62. 62 Does globalization and energy usage influence carbon emissions in South Asia? An empirical revisit of the debate [DOI]
  63. 63 ICT, governance and inequality in Africa [DOI]
  64. 64 Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis [DOI]
  65. 65 Remittances, financial development and poverty reduction in Sub-Saharan Africa: Implications for post-COVID-19 macroeconomic policies [DOI]
  66. 66 Finance, inequality and inclusive education in Sub-Saharan Africa [DOI]
  67. 67 FDI and inequality in Sub-Saharan Africa: does democracy matter? [DOI]
  68. 68 Does Trade Cause Inequality
  69. 69 How Do Migration and Remittances Affect Inequality? A Case Study of Mexico [DOI]
  70. 70 Harnessing remittances for the poor: the role of institutions [DOI]
  71. 71 Europe's Postwar Growth: The Role of Labour Supply. [DOI]
  72. 72 Finance and Inequality: Theory and Evidence [DOI]
  73. 73 Finance and Income Inequality: A Review and New Evidence [DOI]
  74. 74 The Distribution of Gains from Globalization [DOI]
  75. 75 Remittances and Income Inequality in Africa: Financial Development Thresholds for Economic Policy [DOI]

Cited by 6

Human capital development and industrial sector growth in Sub Saharan African countries. An augmented pooled mean group estimator

Enongene Betrand Ewane, Etah Ivo Ewane · Arab Economic and Business Journal · 2024

The Impact of Globalization on Economic Growth in Sub-Saharan Africa: Evidence from the Threshold Effect Regression

Mustapha Mukhtar, Idris Abdullahi Abdulqadir · Economies · 2025

Do higher government spending, financial development, and trade reduce income inequality in low‐income countries? A Bayesian perspective

Mwoya Byaro, Nicholaus Ngowi, Anicet Rwezaula · Politics & Policy · 2024

Showing 3 of 6 known citations — external sources report more than can currently be individually listed.

Related research

Article metrics

Real usage data collected on this platform.

26

Page views

0

PDF downloads

4

Outbound clicks

6

Citations

Views over time

Views by country

Approximate, from request IP at view time — not citizenship or institution. Countries with fewer than 5 views are grouped as "Other".

Traffic sources

Referring site, by host.

Views and downloads exclude known bots/crawlers. Citations combines this platform's own DOI-resolved index with each external source's own reported total — see Cited by above for individually listed citing works. Last refreshed 0 seconds ago.