The impact of economic inequality on trade dependence in developing countries

Document Type : Scientific research

Authors

Saeed Kian Poor ¹

Sogand Hosseinnia Chafjiri ²

¹ Assistant Professor, Department of Economics, Payame Noor University (PNU), Tehran, Iran.(Corresponding Author).

² Department of Economics, Mazandaran University (PNU), Mazandaran, Iran.

https://doi.org/10.22067/economlaw.2025.91608.1418

Abstract

This study examines the impact of economic inequality on trade dependence in developing countries during the period 2013-2023. Quantitative methods and the vector autoregressive (VAR) model were used to analyze the relationships between variables. Data related to economic inequality and trade dependence were collected from reliable international sources, including the World Development Index (WDI) and economic reports of the central banks of selected countries. In the first stage, long-term relationships between variables were identified using the Johansen cointegration test. Then, the impact of shocks caused by economic inequality on trade dependence was analyzed using instantaneous response functions (IRFs), and variance analysis was used to clarify the contribution of each variable to the fluctuations of other variables. The results of this study show that economic inequality has a significant and significant impact on the trade dependence of developing countries, and this impact may vary depending on the specific economic conditions of each country and the time period studied. By providing scientific and documented results, this study provides valuable insights for economic policymakers so that they can reduce economic inequality and create more sustainable and balanced trade dependence by formulating appropriate policies

Keywords

Economic inequality

trade dependence

vector autoregressive model (VAR)

Subjects

• Economical science

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