Trade and income distribution: Is natural disaster an actor?

Authors

  • Doan Ho Dan Tam
    Ho Chi Minh City Open University, Viet Nam
  • Nguyen Phuc Phuong Vy
    Institute Of Applied Research And Training Joint Stock Company, Viet Nam
  • Nguyen Thi Xuan Tham
    University of Economics and Law, Vietnam National University Ho Chi Minh City, Viet Nam
  • Hoang Thi Ngoc Thang
    Saigon Pharmaceutical Company, Viet Nam

DOI:

10.46223/HCMCOUJS.econ.en.11.1.1328.2021

Keywords:

trade; income distribution; inequality; disaster; vulnerability; panel data

Abstract

This paper examines the impact of trade on household income inequality (measured using Gini index) under the condition of disaster (measured using various proxies). The paper uses panel regression on a balanced dataset of 48 countries for 2011-2017 to estimate the impacts, with data combined from World Development Indicators, World Income Inequality Database, and World Risk Report. Various robustness checks are also carried out. The results show that trade does not have any impact on inequality on its own. However, with the existence of disaster, the increase of trade leads to higher income inequality. Finally, the effects are stable when disaster is measured using Composite index or Vulnerability component but becomes not clear when using Exposure component, suggesting that it is vulnerability the main factor that moderates the impact of trade on income inequality.

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References

Adeagbo, A., Daramola, A., Carim-Sanni, A., Akujobi, C., & Ukpong, C. (2016). Effects of natural disasters on social and economic well-being: A study in Nigeria. International Journal of Disaster Risk Reduction, 17(C), 1-12.

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Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality And Social Psychology, 51(6), 1173-1182.

Calderon, C., & Chong, A. (2001). External sector and income inequality in interdependent economies using a dynamic panel data approach. Economics Letters, 71(2), 225-231.

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Received: 02-12-2020
Accepted: 07-01-2021
Published: 26-02-2021

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How to Cite

Tam, D. H. D., Vy, N. P. P., Tham, N. T. X., & Thang, H. T. N. (2021). Trade and income distribution: Is natural disaster an actor?. HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, 11(1), 60–72. https://doi.org/10.46223/HCMCOUJS.econ.en.11.1.1328.2021

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Copyright (c) 2021 Doan Ho Dan Tam; Nguyen Phuc Phuong Vy; Nguyen Thi Xuan Tham; Hoang Thi Ngoc Thang

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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.