Cristiane Vanessa Cândida Borges

Foreign Direct Investment (FDI) is an important determinant of economic growth and contributes as a channel of technology transfer to companies in the host country from a learning process and can influence wage overflow or income inequality. The objective of this study is to analyze the relationship between FDI and income inequality in the sectors of the Brazilian manufacturing industry, from 2007 to 2014. The study is based on the theoretical construction presented by Figini and Görg (2011), and to reach the proposed objective the econometric procedure of panel data is applied.The estimated results indicate that the FDI is statistically significant and contributes to the reduction of the inequality of wages favoring the improvement of the well-being of the society. A non-linear effect of FDI is also observed, in line with the theoretical model. The variables of control, schooling, export coefficient and productivity presented the expected signs and were statistically significant to affect inequality. Thus, policies to reduce inequality should not neglect the presence of the inflow of FDI.