An Empirical Analysis of Globalization, Diversity and Social Cohesion

Abstract

Social cohesion is not only desired for societal and political constancy but a prerequisite for sustainable economic growth and development as well. There are several factors which can mark social solidity. Current study employs the Least Squares Dummy Variables (LSDV) technique to discover the effect of globalization, diversity and income inequality on social cohesion. The analysis is conducted for several developed and developing economies, using panel data from 1990 to 2010. The results demonstrate that globalization has a substantial negative impact on social cohesion. Both diversity and Inclusiveness boost social cohesion however diversity is relatively more important in developed countries. Income inequality is also found to be detrimental for social cohesion particularly in developing countries where certain segment of population is already living below subsistence level.