Does globalization reduce poverty at each level of development? - sensitivity to poverty lines

Abstract

This paper aims to estimate the effect of globalization on poverty by using alternative poverty lines, namely the World Bank’s $ 3.10-a-day poverty approach and national poverty line in comparison with the World Bank’s $ 1.90-a-day absolute poverty approach. The data covers 176 countries for the 2005-2018 period, and the methodology is based on heterogeneous panel data analysis. According to the results, globalization reduces absolute poverty in the least developed and developing countries. Moreover, the negative effect is found as significant only for the least developed countries in terms of national poverty. Lastly, globalization does not reduce poverty in developed countries.