Foreign direct investment, democracy, and income inequality in Latin America and the Caribbean from 1991 to 2017

This dissertation contributes to the discussion of the theoretical relationship between FDI and income inequality by arguing that the relationship depends on the political system. Focusing on the region of Latin America and the Caribbean (LAC), this dissertation uses a fixed-effects model and a panel data set and finds that the positive correlation between FDI and income inequality measured in Gini Coefficient is magnified in countries with a high level of democracy of LAC during 1991-2017. Furthermore, in the following quintile income share analysis, it is found that the effects for the 5th quintile are opposite to the 3rd and the 4th quintiles, suggesting that the wealthiest 20% of the population in these countries benefited from FDI and the political system magnified this effect