Abstract
China has emerged as a key player in Latin America buttressed by its economic relations with the region in trade, foreign direct investment (FDI), and loans. At the same time, a critical issue in the development of Latin America has been its historically high levels of income inequality, which has underlined the social, political, and economic instabilities in the region. This study used data from sixteen Latin countries from 2000 to 2018 to investigate if economic relations with China change income inequality and poverty in Latin America. To account for economic relations with China, we use imports from China, exports to China, Chinese FDI, and Chinese loan commitments as theoretical variables. Following studies on income inequality and poverty determinants, we incorporate GDP per capita, domestic credit, government expenditure, political freedom, economic globalization, investment, education, and inflation into our econometric models. As a comparison, we also test the effects of FDI, exports and imports of United States in Latin America, controlled by the same set of other variables used in the China data. Our study yields some findings that link China’s and United States’ economic relations with Latin America to reductions in income inequality and poverty in the region.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
KEYWORDS
Latin America, China, Trade, Investment, Loans, Income Distribution, Poverty Reduction
