Institutional Distance and Transnational Income Gap - An Instrumental Variable Selection of Population Heterogeneity
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| Title | Institutional Distance and Transnational Income Gap - An Instrumental Variable Selection of Population Heterogeneity
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| Author | Huang Xinfei Shu Yuan and XuYumin |
| Organization | International Business School, SunYat-sen University; Lingnan College, SunYat-sen University |
| Email | huangxf3@mail.sysu.edu.cn |
| Key Words | Institutional Distance; Transnational Income Gap; Genetic Distance; Population Heterogeneity; Estimation of Instrumental Variable |
| Abstract | This paper analyzes the cause of transnational institutional differences from the core of the system and the process of institutional change points. We choose transnational genetic distance as the instrumental variable of institutional difference, and elaborate it as the rationality and validity of the instrumental variable, so estimate the effect of institutional difference on multinational income gap. The article choose the panel data of China and 47 major countries and the empirical results of Panel IV method shows that relative institutional distance to technical front countries (the United States) has the positive effect on multinational income gap between china and the other countries, and the influence is more obvious between China and OECD countries. Control of the factors of geography, human capital, language and religion, we still have similar conclusions. Different genetic distance measurement indicators and estimation methods show that conclusion is robustness. |
| Serial Number | WP409 |
| Time | 2013-02-21 |
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