The Role of Information and Communication Technology in the Relationship between Foreign Direct Investment and Income Inequality: Evidence from Selected Countries

The main purpose of this paper is to investigate the impact of foreign direct investment (FDI) on income inequality with an emphasis on Information and Communication Technology (ICT). Under the division of International Telecommunications Union, underlying countries have been differentiated in two groups of the high and average level of information and communication technology. The research modeling is based on Panel data over the time period of 2001-2016.
The results indicate that foreign direct investment (FDI) and ICT have a negative and significant effect on inequality in two groups of countries. Also, the impact of (FDI) and ICT on income inequality in countries with high level of ICT is more than those with an average level of ICT but the effect is the same in both countries. Based on the results, ICT in each group of countries can change the stable relationship between FDI and inequality.