Globalization and Poverty: Evidence from a Panel of Countries in Different Income Groups

Oktayer A., Alper B.

International Congress on Multidisciplinary Social Sciences, Ankara, Turkey, 7 - 10 May 2019, pp.58-71

  • Publication Type: Conference Paper / Full Text
  • City: Ankara
  • Country: Turkey
  • Page Numbers: pp.58-71
  • Yıldız Technical University Affiliated: Yes


Globalization refers to the phenomenon of increased capital and labor mobility and integration of related policies across the globe. Therefore, during the process of globalization, unprecedented developments, such as a much higher international trade level and the increased power of financial capital have played a central role in political, economical, and social developments. Despite observing its outcomes for almost half a century, the effects of globalization are still highly debated. Literature on this subject is rich with, often contradictory, results. On one hand, some authors claim that globalization decreases poverty, for example, through increasing growth rate. On the other hand, others claim that free trade and financial globalization exacerbate extreme poverty issue. In this paper, we investigate the relationship between poverty and globalization for the countries from different income groups and levels of development, and covering the period between 1990-2016. The results of our analysis, in which we used fixed effects panel data models, vary depending on income level of countries. The evidence from the models denote that economic globalization is significantly and positively associated with poverty for only middle income countries. The coefficients of trade globalization are found negative and significant for low and high income countries, which indicates that trade globalization decreases poverty in such countries; whereas the coefficient of financial globalization is found positive, and significant for only middle income countries.