Impact of Trade on Inequalities in Latin America: Does the Nature of Partners and Products Matter?

T. M. García Muñoz, J. Milgram-Baleix

This study investigates the trade-income inequalities relationship in Latin America by using a panel dynamic approach to take into account the high persistent behaviour of income inequalities. Our results tend to show that exports provoke an inequality-decreasing effect, while imports exerts an inequality-enhancing effect. Trade with developed countries would have no obvious effect on inequalities in Latin America. Exports to developing countries significantly decrease income inequality while imports from low income countries have no significant effect. Trade in primary goods explains most part of the impact. Trade in high-tech goods in general and with developing countries in particular, increases income inequality.

Keywords: globalization income inequality Latin America

M. A. Ariño Martín

R. Salmerón Gómez, C. García García, A. Rodríguez Sánchez, C. García García