The effect of FDI on inequality depends on government size

Lee, Cheol-Sung, Francois Nielsen, and Arthur S. Alderson. 2007. "Income Inequality, Global Economy and the State." Social Forces 86:77-112.

In sum, the results of the interactive models support our hypothesis that
the effects of foreign capital penetration on income inequality can be either
positive or negative, depending on the buffering role of the state. In societies
with relatively small public sectors, higher level of FDI is associated with higher inequality. However, in societies with larger public sectors, this relationship is reversed.