Trade, Infrastructure and Income Inequality in Selected Asian Countries: An Empirical Analysis

  • Ajitava Raychaudhuri
  • Prabir De


Theoretical and empirical works related to international trade are confined to models which have labour and capital as explicit factors of production. Although income inequality and trade openness have been given importance in the literature, the role of quantity and quality of infrastructure in international trade has not been investigated extensively in this context. Similarly, growth regressions have highlighted the role of infrastructure and trade openness on economic growth independently, while inclusive growth has not received much attention. This study attempts to unravel the interlinkages and interconnections among infrastructure, trade openness and income inequality, using panel data of 14 Asia-Pacific countries at different levels of development. The empirical exercise clearly reveals influence of trade openness and infrastructure on income inequality but the reverse is not necessarily true. Moreover, country-specific factors turn out to be important determinants of trade openness and income inequality. Further, dynamic panel estimates reveal importance of initial values of both income inequality and trade openness as important determinants in the evolution of these variables, thus supporting the persistence thesis, apart from the positive influence of infrastructure as a determining variable.


Income Inequality Capita Income Real Exchange Rate Trade Liberalization Trade Openness 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



An earlier version of the paper was presented at the international workshop ‘Trade, Investment and Regional Integration: Lessons for Policy Makers’, organized by ARTNeT/ESCAP and the Ministry of Commerce & Industry, Government of India, held at New Delhi, 11–12 March 2010. Authors sincerely acknowledge the useful comments of anonymous referee of ARTNeT/ESCAP, Mia Mikic and workshop participants. This paper was prepared as part of the ARTNeT initiative. The technical support of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) is gratefully acknowledged. An earlier version of the paper was published as ARTNeT working paper no. 8210 in 2010. The opinion, figures and estimates are responsibility of the authors and should not be considered as reflecting the views or carrying the approval of the United Nations, ARTNeT, RIS and JU. Any remaining errors are the responsibility of the authors.


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© Springer India 2016

Authors and Affiliations

  1. 1.Department of EconomicsJadavpur UniversityKolkataIndia
  2. 2.Research and Information System for Developing Countries (RIS)New DelhiIndia

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