scholarly journals Economic Growth, Financial Development, and Income Inequality

2017 ◽  
Vol 53 (12) ◽  
pp. 2794-2825 ◽  
Author(s):  
Donghyun Park ◽  
Kwanho Shin
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Development

scholarly journals Sustainable Utilization of Financial and Institutional Resources in Reducing Income Inequality and Poverty

2021 ◽  
Vol 13 (3) ◽  
pp. 1038
Author(s):  
Atta Ullah ◽  
Zhao Kui ◽  
Saif Ullah ◽  
Chen Pinglu ◽  
Saba Khan
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Development ◽  
Institutional Quality ◽  
Vital Role ◽  
Electronic Government ◽  
Sustainable Utilization ◽  
One Belt One Road ◽  
Institutional Resources ◽  
Belt And Road

This study aims to determine the role of globalization, electronic government, financial development, concerning the moderation of institutional quality in reducing income inequality and poverty in One Belt One Road countries. The electronic government and regional integration of the economies of the One Belt One Road countries has increased globalization and can play a vital role in reducing income inequality and poverty. However, this globalization and digital transformation of government systems can only be beneficial in the presence of good institutional quality. The sample includes 64 One Belt One Road countries from 2003 to 2018. We employed a two-step system generalized method of moment (Sys-GMM) and a robustness check through Driscoll–Kraay standard errors regression. Our findings show that globalization, economic growth, e-government development, government expenditure, and inflation have a statistically significant and negative impact on income inequality and are key to eradicating income inequality and poverty. On the other hand, financial development, gross capital formation, and population size positively influence income inequality, which causes an increase in poverty and income inequality as financial development and population levels increase. Moderating variable institutional quality also positively impacts income inequality, which means that institutional quality in Belt and Road Countries is weak, as they are mostly developing countries that need to improve their systems. Moreover, the marginal effect also revealed that institutional quality has a corrective effect on the factors’ relationship with income inequality. Our findings endorse and conclude that globalization and e-government development improve economic growth and eradicate poverty and income inequality by boosting digitalization, investments, job creation, and wage increases for semi-skilled and unskilled human capital in Belt and Road countries. The sustainable utilization of financial and institutional resources plays a vital role in reducing income inequality and poverty in Belt and Road countries.

A CONTEMPORARY RE-EXAMINATION OF MALAYSIA’S ECONOMIC GROWTH: THE ISSUES OF EQUITY, EFFICIENCY AND LIBERALIZATION

2017 ◽  
Vol 62 (02) ◽  
pp. 509-530 ◽  
Author(s):  
AZFAR HILMI BAHARUDIN ◽  
YAP SU FEI
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Least Squares ◽  
Financial Development ◽  
Direct Investment ◽  
Positive Relationship ◽  
Empirical Investigation ◽  
Ordinary Least Squares ◽  
Statistical Relationship ◽  
Long Run

This paper is an empirical investigation on economic growth for Malaysia, with focus on income inequality, foreign direct investment (FDI), financial development and trade. Co-integrating regression procedures namely, fully modified ordinary least squares (FMOLS), canonical co-integrating regression (CCR) and dynamic ordinary least squares (DOLS) were employed. Positive relationship between growth with financial development and trade are found to be consistent across all estimations. Income inequality on the other hand though negative, does not seem to exhibit robust significant statistical relationship with growth. The orders of integration for variables used have been demonstrated to be governed such that a long-run relationship prevails.

scholarly journals Does Financial Development Reduce the Poverty Gap?

2021 ◽  
Author(s):  
Jakob de Haan ◽  
Regina Pleninger ◽  
Jan-Egbert Sturm
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Development ◽  
Indirect Effect ◽  
Fixed Effects ◽  
Poverty Line ◽  
Financial Instability ◽  
Composite Measure ◽  
Baseline Model ◽  
Private Credit

AbstractFinancial development may affect poverty directly and indirectly through its impact on income inequality, economic growth, and financial instability. Previous studies do not consider all these channels simultaneously. To proxy financial development, we use the ratio of private credit to GDP or an IMF composite measure. Our preferred measure for poverty is the poverty gap, i.e. the shortfall from the poverty line. Our fixed effects estimation results for an unbalanced panel of 84 countries over the 1975–2014 period suggest that financial development does not have a direct effect on the poverty gap. However, as financial development leads to greater inequality, which, in turn, results in more poverty, financial development has an indirect effect on poverty through this transmission channel. Only if we use poverty lines of $3.20 or $5.50 (instead of $1.90 a day as in our baseline model) to define the poverty gap, we find that economic growth reduces poverty. This implies that in those cases the overall effect of financial development on poverty may be positive or negative, depending on which indirect effect, i.e. that of income inequality or growth, is stronger. Financial instability does not seem to affect the poverty gap. These results are consistent across various robustness checks.

scholarly journals The Impacts of Financial Development, Urbanization, and Globalization on Income Inequality: A Regression-based Decomposition Approach

2019 ◽  
Vol 18 (2) ◽  
pp. 126-141 ◽  
Author(s):  
Wai Choi Lee ◽  
Tsun Se Cheong ◽  
Yanrui Wu ◽  
Jianxin Wu
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Income Inequality ◽  
Financial Development ◽  
Positive Impact ◽  
County Level ◽  
Inclusive Growth ◽  
Inequality Decomposition ◽  
Decomposition Approach

This paper investigates the impacts of financial development, urbanization, and globalization on income inequality in China by applying a regression-based inequality decomposition approach to panel data on Chinese provinces. Provincial data on urbanization and globalization are combined with new data collected from a unique database of financial development in China compiled at the county level. Our findings suggest that financial development, urbanization, and globalization have a positive impact on income. However, our inequality decomposition suggests that financial development may be particularly important for promoting inclusive growth, since financial development not only stimulates economic growth but is also found to be a factor that reduces inequality.

scholarly journals India’s Finance-Growth Nexus: Cointegration and Causality Analysis with Income Inequality and Globalization

2018 ◽  
Vol 5 (6) ◽  
pp. 12
Author(s):  
Takashi Fukuda
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Development ◽  
Negative Impact ◽  
Structural Break ◽  
Trade Openness ◽  
Cointegration Analysis ◽  
Causality Analysis ◽  
Causality Tests ◽  
Finance Growth Nexus

This paper investigates India’s finance-growth nexus―the relationship between financial development and economic growth―taking the weakly exogenous variables of income inequality, trade openness and financial openness together with the structural break dummy into the cointegration analysis of the vector error correction model. Implementing the Granger causality tests we have detected that both financial size and financial efficiency exhibit a negative impact on economic growth with no feedback from the latter to each of the former. It is important for policy makers to recognize that finance does not always promote economic growth, considering how to convert the effect of financial development from “growth-retarding” to “growth-enhancing”.

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