Abstract
Abstract. This policy brief is intended to provide policymakers with a summary of the results of our research project entitled “Trade, Growth and Economic Inequality in the Asia-Pacific Region”, which explores and documents the linkages between international trade and inequality in the Asia-Pacific Region (APR).The project’s eleven research papers appeared in a special issue of the Journal of Asian Economics in February 2017. Overall, we conclude that the relationships between international trade, foreign direct investment (FDI), economic growth and inequality are extremely complicated, so no single theory should be relied upon for policy guidance across all APR countries with their varying stages of development and unique characteristics. Our studies find some evidence that trade or FDI contribute to inequality, some evidence that it reduces inequality and some evidence of no causal relationship. These seemingly conflicting results are not at all surprising given the complex relationships involved and the different countries, time periods, and means of measuring inequality, trade and FDI our authors adopted. Our main takeaway for policymakers is to be wary of both anti-trade and pro-trade advocates who provide “one size fits all” advice related to trade, FDI and inequality; these economic relationships are much too complex for that.
Keywords. International trade, Foreign direct investment, Economic growth, Economic inequality.
JEL. F13, F14, F16, F21, F23, J31.References
Chen, B. (2017). Upstreamness, exports, and wage inequality: Evidence from Chinese manufacturing data, Journal of Asian Economics, 48, 66-74. doi. 10.1016/j.asieco.2016.11.003
Greaney, T.M., & Karacaovali, B. (2017). Editorial: Trade, growth and economic inequality in the Asia-Pacific region, Journal of Asian Economics, 48, 1-5. doi. 10.1016/j.asieco.2016.12.001
Greaney, T.M., & Li, Y. (2017). Multinational enterprises and regional inequality in China, Journal of Asian Economics, 48, 120-133. doi. 10.1016/j.asieco.2016.09.003
Greaney, T.M., Li, Y., & Tu, D. (2017). Pollution control and foreign firms’ exit behavior in China, Journal of Asian Economics, 48, 148-159. doi. 10.1016/j.asieco.2016.10.006
Kamal, F., & Lovely, M.E. (2017). Import competition from and offshoring to low-income countries: Implications for employment and wages at U.S. domestic manufacturers, Journal of Asian Economics, 48, 100-119. doi. 10.1016/j.asieco.2016.10.010
Karacaovali, B., & Tabakis, C. (2017). Wage inequality dynamics and trade exposure in South Korea, Journal of Asian Economics, 48, 48-65. doi. 10.1016/j.asieco.2016.11.004
Kimura, F., & Chang, M.S. (2017). Industrialization and poverty reduction in East Asia: Internal labor movements matter, Journal of Asian Economics, 48, 23-37. doi. 10.1016/j.asieco.2016.10.005
Kiyota, K., & Maruyama, S. (2017). ICT, offshoring and the demand for part-time workers: The case of Japanese manufacturing, Journal of Asian Economics, 48, 75-86. doi. 10.1016/j.asieco.2016.10.007
Lee, S. (2017). International trade and wage inequality: The case of South Korea, Journal of Asian Economics, 48, 38-47. doi. 10.1016/j.asieco.2016.11.001
McLaren, J., & Yoo, M. (2017). FDI and inequality in Vietnam: An approach with census data, Journal of Asian Economics, 48, 134-147. doi. 10.1016/j.asieco.2016.11.002
Piketty, T. (2014). Capital in the twenty-first century, Cambridge, MA: Harvard University Press.
Stiglitz, J. (2012). The price of inequality: How today’s divided society endangers our future, New York, NY: W.W. Norton & Company.
Tanaka, A. (2017). Foreign direct investment and temporary workers in Japan, Journal of Asian Economics, 48, 87-99. doi. 10.1016/j.asieco.2016.10.004
Yang, Y.,& Greaney, T.M. (2017). Economic growth and economic inequality in the Asia-Pacific region, Journal of Asian Economics, 48, 6-22. doi. 10.1016/j.asieco.2016.10.008
