I need help collecting data at the regional level and specifying an empirical model. My data and methodology chapter (3000 words) needs to be submitted by 13 January.
Does Globalization Impact Regional Inequality in South Korea? An Empirical Investigation of Post Neo-Liberal Globalization Era.
Motivation for the research and Literature gap
South Korea had adopted a -neo-liberal globalisation policy- due to a prior deal with the IMF during the financial crisis, which required South Korea to sign a formal commitment to abide by IMF rules to rebuild South Korea when the rescue package was offered. South Koreas economy has significantly improved thanks to the IMF deal. Findings show that the 1997–1998 financial crisis and the 1990s globalisation trend impacted income inequality through unfavourable labour market outcomes that increased unemployment, increased the use of contingent employees, and expanded income disparities. Additionally, openness is linked to rising income disparity, which affects economic growth. Growth may be hampered by the rise in inequality that globalisation has brought about. There is compelling evidence that inequality may considerably reduce growths pace and sustainability. A certain amount of income inequality is beneficial, and empirical research demonstrates that increased exposure to global trade impacts how income is distributed through, among other things, increased returns to education, changes in technology that are skill-based, urban-rural migration, and others. Instead of alleviating the strain on within-country inequality brought on by more integration into the global economy, neoliberal policies, founded on market fundamentalism and a prior conviction in their efficiency, greatly worsen the global economic conditions. It would be worth exploring the impact of globalisation after implementing neo-liberal globalisation policies in South Korea and its impact on regional inequality and the countrys growth. While exploring the literature, it has been found that several studies have focused on the impact of globalisation on regional inequality considering cross-country analysis (Ezcurra and Rodríguez-Pose, 2013; Çelik and Basdas, 2010; Zhou et al., 2011) or focus on inequality in south Korea (Koo, 2007; Mah, 2003’; Sato and Fukushige, 2009; Song, and Kim, 2022; Yang, and Greaney, 2017), there is no such studies which compared the impact of globalisation on income inequality considering pre and post neo-liberal globalisation era in the context of South Korea. This study will fill the gap in the literature through this research that will help to get more insight into how globalisation policies in the context of liberalisation increase or decrease regional income inequality.
Research question: Does globalisation (trade and FDI) impact regional inequality after the post-implementation of Neo-liberal globalisation policies?
Hypotheses:
• Globalisation has not impacted regional inequality after the post-implementation of Neo-liberal policies.
Or
• Globalisation has not impacted regional inequality y when the dummy is equal to 1 (concerning the base case in which the dummy is equal to 0
Data source and Time period
• Data source World Bank Indicators
• Time period 1980 to 2022
• Core Variables:
- Dependent variable: income inequality in terms of Gini coefficient
- Independent variables: trade openness (ratio of total trade to GDP) and FDI (as % of GDP)
- Dummy variable (0 and 1, where 1 shows post implementation of neo-liberal policies and otherwise)
Model specifications
ARDL model based on time series data:
Regional Income Inequality = a + b(trade openness)it + c(FDI)it + d(controls)it + eit
Proposed Estimation and Diagnostic Test
1. Statistical Descriptive
2. Correlation
3. Outlier testing
4. Normality
5. Endogeneity Test
6. Unit root test
• Augmented Dickey-Fuller (ADF) test
• Phillips-Perron (PP) test
• Kwiatkowski, Phillips, Schmidt and Shin (KPSS) test
7. ARDL Bound Testing Approach to co-integration
• Testing variables’ integration order (using unit root test)
• Optimum model selection
• Integration test: Overall F-test
• Error correction Model
8. The goodness of fit test
9. Lagrange multiplier (LM) test
10. Correlogram, Test
11. Heteroskedasticity Test
12. Stability test (CUSUM and CUSUM square)
Reference
Çelik, S. and Basdas, U., 2010. How does globalisation affect income inequality? A panel data analysis. International advances in economic research, 16(4), pp.358-370.
Dogan, B. and Can, M., 2019. The Relationship Between Globalization and Income Distribution: An Empirical Analysis in the Context of South Korea. In Emerging Economic Models for Global Sustainability and Social Development (pp. 20-45). IGI Global.
Ezcurra, R. and Rodríguez-Pose, A., 2013. Does economic globalisation affect regional inequality? A cross-country analysis. World Development, 52, pp.92-103.
Koo, H., 2007. The changing faces of inequality in South Korea in the age of globalisation. Korean Studies, 31(1), pp.1-18.
Mah, J.S., 2003. A note on globalisation and income distribution—the case of Korea, 1975–1995. Journal of Asian Economics, 14(1), pp.157-164.
Sato, S. and Fukushige, M., 2009. Globalisation and economic inequality in the short and long run: The case of South Korea 1975–1995. Journal of Asian Economics, 20(1), pp.62-68.
Song, S. and Kim, D., 2022. The Effects of Globalization on Korea. Korea Observer, 53(1), pp.135-159.
Yang, Y. and Greaney, T.M., 2017. Economic growth and income inequality in the Asia-Pacific region: A comparative study of China, Japan, South Korea, and the United States. Journal of Asian Economics, 48, pp.6-22.
Zhou, L., Biswas, B., Bowles, T. and Saunders, P.J., 2011. Impact of globalisation on income distribution inequality in 60 countries. Global Economy Journal, 11(1), p.1850216.