Does the Impact of Trade Openness on Income and Income Inequality Differ in Developed and Developing Countries?

It is mostly believed that the trade openness creates a competitive environment resulting in economic growth. But, trade often produces losers as well as winners. According to the theoretical framework, trade liberalization is associated with narrowing or widening income disparities within countries. Empirical studies both support and oppose trade openness. Studies can be divided into two categories. In this study, we underline the link between foreign trade and income inequality in developed and developing countries by such these explanatory variables. For this purpose we use panel data to investigate the trade's impact on levels and distribution of income.