GLOBALISATION AND WORLD ECONOMIC POVERTY: THE SIGNIFICANCE OF HIDDEN DIMENSIONS

The aim of our research is to examine how individual dimensions of globalization affect economic poverty in the World. For this, regression models are estimated with FGT0 or FGT1 poverty measures as dependent variables and KOF indices of globalization as dependent variables. The poverty indices are estimated for 119 countries’ income distributions assuming log-normality and using Gini estimates from the WID2 database and GDP/capita from The World Bank database for the years 1990-2005. It has turned out that the “partial” impact of selected dimension of globalization on poverty is either linear or nonlinear, ceteris paribus. The nonlinear impact is of the U-shaped form or the inverted U-shaped form. Our results contradict some typical ‘linear’ findings when poverty measures are regressed only on one dimension of globalization. In other words, when some crucial dimensions of globalization are neglected in regression analysis the conclusions about impact of globalization on world poverty could be misleading.