Do trade liberalization and external debt offset income inequality? New evidence from selected African countries

Figures & data

Table 1. Descriptive statistics

Variable	Measurement	Obs	Mean	Std. Dev.	Min	Max
GINIC	Disposable income	570	45.605	5.976	37.9	63.6
TRADE	Trade (% of GDP)	570	62.805	23.903	17.927	152.547
GDPPC	Growth Per capita (%)	570	1.944	3.9	−22.312	21.028
EXTDEBT	External debt (% of GNI)	570	48.075	33.91	3.895	202.624
INFL	Consumer Price Index (%)	570	8.627	19.475	−72.729	324.997
FDI	Net inflows (% of GDP)	570	3.577	4.619	−6.37	39.456

Source: Author’s Calculation through STATA 17.

Table 2. Correlations matrix of the variables

Variables	(1)	(2)	(3)	(4)	(5)	(6)
(1) GINIC	1.000
(2) TRADE	0.211	1.000
(3) GDPPC	0.068	0.055	1.000
(4) EXTDEBT	−0.081	0.159	−0.184	1.000
(5) INFL	0.038	0.184	−0.081	0.188	1.000
(6) FDI	−0.077	0.358	0.158	0.115	0.151	1.000

Source: Author’s Calculation through STATA 17.

Table 3. Variance inflation factor

	VIF	1/VIF
FDI	1.194	.837
TRADE	1.184	.844
EXTDEBT	1.098	.91
GDPPC	1.078	.927
INFL	1.078	.928
Mean VIF	1.127	.

Source: Author’s Calculation through STATA 17.

Table 4. Jochmans portmanteau test for within-group correlation

Source	chi2	Prob > chi2
Jochmans portmanteau test for within-group correlation in panel data	30.000	1.0000

Note: H₀: no within-group correlation.

Source: Author’s Calculation through STATA 17.

Table 5. White’s and Breusch’s “Pagan/Cook “Weisberg test for heteroskedasticity

Source	chi2	Prob > chi2
White’s test for Heteroskedasticity	63.610	.0000
Breusch“Pagan/Cook “Weisberg test for heteroskedasticity	37.84	.0000

Note: H₀: Homoskedasticity.

Source: Author’s Calculation through STATA 17.

Table 6. Hausman test results

	Coef.
Chi-square test value	.005
P-value	1.000

Source: Author’s Calculation through STATA 17.

Table 7. Drisc/Kraay Random and Fixed Effects Estimates

Dep. Var (Gini)	Random Effects	Fixed Effects
TRADE	−0.013***	−0.014***
	(0.000)	(0.000)
EXTDEBT	0.004***	0.004***
	(0.001)	(0.000)
GDPPC	0.009	0.009
	(0.149)	(0.104)
INFL	0.001	0.001**
	(0.146)	(0.028)
FDI	0.019**	0.019**
	(0.027)	(0.010)
Constant	46.19***
	(0.000)
Observations	570	570
Number of groups	30	30

P values in parentheses ***p<0.01, **p<0.05, *p<0.1.

Source: Author’s Calculation through STATA 17.

Note. Since the Gini coefficient ranges from 0 denoting perfect equality to 100 denoting perfect inequality, the significant effect of the predictor variables should be reversed for interpretation.

Data availability statement

The data used for this research can be accessed at: https://wid.world/country/switzerland/ & https://data.worldbank.org/indicator