Foreign direct investment and income inequality in Latin American countries: A panel data cointegration approach

This study shows empirical evidence on the relationship between inward foreign direct investment (FDI) and income inequality in Latin American countries by using panel cointegration techniques. The data was built with the measures of stock inward FDI and the income inequality index Estimated Household Income Inequality (EHII) for a 10-country panel. The empirical analysis finds long-term relationship and causality from FDI to Income Inequality but no short run causality can be concluded.