Analysis of the Economic Effects of Trade Liberalization on the Inequality of Income Distribution in A Selected of Developing Countries: A Dynamic Panel Data (GMM) Approach

Ebrahim ghaed¹ MortezaEbrahimi² Mohammadtaher Ahmadi Shadmehri³ Maryam Galavi⁴

1) Ph.D. Student Monetary and International Economics, Ferdowsi University of Mashhad, Mashhad, Iran Email:
2) MSc in Economic Development and Planning, Ferdowsi University of Mashhad, Mashhad, Iran Email:
3) Associate Professor, Department of Economics, Ferdowsi University of Mashhad, Mashhad, Iran. (Corresponding Author), Email:
4) M.A. Student, Energy Economics, Kharazmi University Tehran, Tehran, Iran Email:

IOI Code : XYCF-KZGCK
Publication : 2nd.International Congress on Management, Economy, Humanities and Business Development(icmba.ir)
Abstract :
    The main objective of this study is to analyze the economic effects of trade liberalization on the inequality of income distribution in eighteen developing countries, including Iran, during the period of 2011-2020. The dynamic panel data method based on the generalized method of moments (GMM) was used to analyze the topic. The variables used in this research include trade liberalization, inequality of income distribution (Gini coefficient), gross domestic product per capita, human development index, capital productivity, inflation rate, and urbanization rate. Based on the obtained results and in line with the theoretical foundations, the effect of the coefficients of the variables was expected and they are statistically significant in the way that the trade liberalization index has a negative and significant effect on the inequality of income distribution. That is, the implementation of trade liberalization policies can have positive effects on increasing the level of income and consequently reducing the inequality of income distribution. Also, gross domestic product per capita, human development index, and capital productivity have a negative and significant effect, and the variables of the inflation rate and urbanization rate have a positive and significant effect on the inequality of income distribution.

Keywords : trade liberalization income inequality selected developing countries generalized method of moments (gmm)