scholarly journals The Role of Financial Globalization through FDI in Driving Inequality in the Sub-Saharan Region

2021 ◽  
Vol 8 (5) ◽  
pp. 10
Author(s):  
Kossi AYENAGBO
Keyword(s):  
Income Inequality ◽  
Economic Status ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Critical Factor ◽  
Sub Saharan Africa ◽  
Financial Globalization ◽  
Financial Variables ◽  
Sub Saharan ◽  
The 2008 Financial Crisis

This paper examines the relationship between globalization and income inequality in Sub-Saharan Africa (SSA). Globalization is here measured using trade variables like the openness rate (TO), financial variables including FDI while income inequality is measured by the GINI coefficient. This was achieved by using data from 26 countries over the period 2005-2014, using the System Generalized Method of Moments (SGMM) estimator to obtain results from the African context. The results suggested that trade openness exerted an equalizing effect while financial globalization through FDI has been the critical factor driving inequality in the SSA since 2005. The results also showed that outside of FDI, corruption contributes greatly to widening inequality by about 3%. The effect of the other control variables was all together insignificant. The prevailing economic status as portrayed following on the back of the 2008 financial crisis has led to an increase in inequalities in SSA countries. These results are robust to the using of the KOF Globalization index. Through this research, governments and policymakers have to introduce robust and appropriate policies and interventions in their drive for economic growth to decisively deal with corruption and so direct FDI to economically sound targeted priority programs.    

scholarly journals Growth effect of income inequality in sub-Saharan Africa: exploring the transmission channels

2020 ◽  
Vol 56 (2) ◽  
pp. 176-190
Author(s):  
Ibrahim Abidemi Odusanya ◽  
Anthony Enisan Akinlo
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Growth Effect ◽  
Credit Market Imperfection ◽  
Negative Effect ◽  
Sub Saharan ◽  
Positive Effect ◽  
Ssa Countries

AbstractSub-Saharan Africa (SSA) ranks as the second most unequal region globally (in terms of income distribution), harboring 10 of the 19 most unequal countries in the world. This paper explores the channels through which income inequality exerts its effects on economic growth in SSA. The study spans the period 1995–2015, focusing on 31 SSA countries. Findings from the two-step system generalized method of moments suggest that income inequality exerts a significant positive effect on economic growth via the saving transmission channel, while it has a statistically significant negative effect on economic growth in the region through the channels of fertility, credit market imperfection, and fiscal policy.

scholarly journals Effect of Financial Inclusion on Income Inequality in Sub-Saharan Africa

2020 ◽  
pp. 1-15
Author(s):  
Kipoh Mpele Esther
Keyword(s):  
Income Inequality ◽  
Low Income ◽  
Low Cost ◽  
Panel Study ◽  
Generalized Method Of Moments ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Negative Effect ◽  
Sub Saharan

Aims: To analyze financial inclusion as a channel to alleviate inequality in order to provide insight into the edifice of inequality reduction. Study Design:  Dynamic panel study. Place and Duration of Study: Sub-Saharan African countries over the period 2004-2018. Methodology: Using the generalized method of moments (GMM) on a sample of 27 Sub-Saharan African countries. Results: The results show that the estimated financial inclusion index has a negative effect on income inequality. Therefore, the depth of commercial bank branches and the effective use of bank accounts reduce income inequality. Conclusion: Increase financial inclusion as well as the development of financial infrastructure and the provision of specific low-cost services tailored to low-income households.

scholarly journals EFFECT OF TRADE OPENNESS ON ECONOMIC GROWTH IN SUB-SAHARAN AFRICA: DYNAMIC PANEL ANALYSIS

2021 ◽  
pp. 23-35
Author(s):  
Wycliffe Mugun
Keyword(s):  
Economic Growth ◽  
Capital Stock ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Allocation Of Resources ◽  
African Countries ◽  
Regional Trade ◽  
Explanatory Variables ◽  
Sub Saharan

Theoretically, proponents of traditional trade theories argue that trade openness can enhance economic growth by providing access to goods and services, achieving efficiency in allocation of resources through comparative advantage, creation of employment opportunities and generation of capital that leads to better living standards in terms of higher level of GDP per capita,trade openness may strengthen economic growth through different channels such as efficient allocation of resources. However, owing to the fact that there are limited studies on trade openness, various studies indicate divergent views on the effect of trade openness on economic growth. For this reason, it is not clear whether or not trade openness affect economic growth in Sub-Saharan Africa. The main objective of this study was to investigate the effect of trade openness on economic growth in Sub-Saharan Africa. Control variables used in the regression included oversees development assistance, population growth rate, domestic credit and foreign direct investment. Trade openness, inflation and capital stock were explanatory variables and economic growth the dependent variable. This study was modeled using the Neoclassical Growth theory. One- step difference Generalized Method of Moments results revealed that trade openness had a positive and significant effect on economic growth, capital stock positive and insignificant relationship, while inflation had positive and insignificant relationship with economic growth in SSA.The study thus recommends that there is a need for improving balance of trade by increasing exports diversification and balanced growth and the policy makers of SSA countries should have to give a priority for trade and investment policies which requires some reforms to adjust with changing economic environment. The study concluded that extra-regional trade spurs higher output than intra-regional trade. This may be due to lack of efficiency in the implementation of trade agreements among the intra-regional constituent countries such as Sub-Saharan African countries and lack of full commitment by the member states governments to trade more intensively. KEYWORDS: Trade openness, economic growth, Sub-Saharan Africa

Trade openness, FDI, and income inequality: Evidence from sub‐Saharan Africa

2021 ◽  
Author(s):  
Chenghong Xu ◽  
Mingming Han ◽  
Toyo Amegnonna Marcel Dossou ◽  
Festus Victor Bekun
Keyword(s):  
Income Inequality ◽  
Trade Openness ◽  
Sub Saharan Africa ◽  
Sub Saharan

scholarly journals Improving ICT and renewable energy for environmental sustainability in sub-Saharan Africa

2020 ◽  
Vol 2 (3) ◽  
pp. 82-90
Author(s):  
Kabiru Maji Ibrahim ◽  
Salisu Ibrahim Waziri
Keyword(s):  
Renewable Energy ◽  
Co2 Emissions ◽  
Environmental Sustainability ◽  
Energy Use ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Information And Communication ◽  
Sub Saharan

The study investigates the role of information and communication technology (ICT) and renewable energy on environmental sustainability in sub-Saharan Africa. The system generalized method of moments (GMM) was employed to estimate data of 45 sub-Saharan countries that cover the 2008 -2016 period. Result reveals that increasing ICT penetration and renewable energy use reduce CO2 emissions and improves environmental sustainability. Economic growth and population growth also mitigate CO2 emissions while education and trade openness have a neutral impact. These findings imply that increasing penetration of ICT facilities and renewable energy in the region will promote inclusive environmental sustainability. The interactive estimation of ICT variables was further considered to determine net effects and the ICT threshold that is relevant for policy implication.

scholarly journals Income Inequality and Population Health in Sub-Saharan Africa: A Test of Income Inequality-Health Hypothesis

2021 ◽  
Vol 29 ◽  
pp. 235-254
Author(s):  
Ibrahim Abidemi Odusanya ◽  
◽  
Anthony Enisan Akinlo ◽  
Keyword(s):  
Mortality Rate ◽  
Income Inequality ◽  
Population Health ◽  
Generalized Method Of Moments ◽  
Infant Mortality Rate ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Life Expectancy At Birth ◽  
Sub Saharan ◽  
Poor Population

Existing studies have shown that income inequality remains a core determinant of population health. These findings are in line with the Income Inequality-Health Hypothesis (IIHH). However, this assertion remains unclear for Sub-Saharan Africa (SSA), despite the rising trend of income disparity in the region and the vastness of the studies that tested the validity of the IIHH. This inferential study, therefore, examines the effect of income inequality on health for 31 Sub-Saharan African countries from 1995 to 2015 using life expectancy at birth, infant mortality rate, and under-five mortality rate as indicators of population health, as well as the Gini index as a measurement of income inequality. The study employed the Generalized Method of Moments (GMM). We infer that income inequality contributes significantly to poor population health in Sub-Saharan Africa, thereby affirming the validity of the Income Inequality-Health Hypothesis for the region.

scholarly journals Financial Inclusion, Income Inequality and Sustainable Economic Growth in Sub-Saharan African Countries

2021 ◽  
Vol 13 (4) ◽  
pp. 1780
Author(s):  
Chima M. Menyelim ◽  
Abiola A. Babajide ◽  
Alexander E. Omankhanlen ◽  
Benjamin I. Ehikioya
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Services ◽  
Sub Saharan Africa ◽  
Kuznets Curve ◽  
African Countries ◽  
Financial Access ◽  
Sub Saharan ◽  
Sustainable Economic Growth ◽  
The Impact

This study evaluates the relevance of inclusive financial access in moderating the effect of income inequality on economic growth in 48 countries in Sub-Saharan Africa (SSA) for the period 1995 to 2017. The findings using the Generalised Method of Moments (sys-GMM) technique show that inclusive financial access contributes to reducing inequality in the short run, contrary to the Kuznets curve. The result reveals a negative effect of financial access on the relationship between income inequality and economic growth. There is a positive net effect of inclusive financial access in moderating the impact of income inequality on economic growth. Given the need to achieve the Sustainable Development Targets in the sub-region, policymakers and other stakeholders of the economy must design policies and programmes that would enhance access to financial services as an essential mechanism to reduce income disparity and enhance sustainable economic growth.

scholarly journals Enhancing governance for environmental sustainability in sub-Saharan Africa

2020 ◽  
pp. 014459871990065 ◽  
Author(s):  
Simplice A Asongu ◽  
Nicholas M Odhiambo
Keyword(s):  
Environmental Sustainability ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Sub Saharan Africa ◽  
Economic Governance ◽  
Institutional Governance ◽  
Government Effectiveness ◽  
Sub Saharan ◽  
Political Economic ◽  
Political Governance

This study assesses whether improving governance standards affects environmental quality in 44 countries in sub-Saharan Africa for the period 2000–2012. The empirical evidence is based on generalized method of moments. Bundled and unbundled governance dynamics are used, notably: (i) political governance (consisting of political stability and “voice and accountability”); (ii) economic governance (entailing government effectiveness and regulation quality), (iii) institutional governance (represented by the rule of law and corruption-control); and (iv) general governance (encompassing political, economic, and institutional governance dynamics). The following hypotheses are tested: (i) Hypothesis 1 ( improving political governance is negatively related to carbon dioxide (CO2) emissions); (ii) Hypothesis 2 ( increasing economic governance is negatively related to CO2 emissions); and (iii) Hypothesis 3 ( enhancing institutional governance is negatively related to CO2 emissions). Results of the tested hypotheses show that the validity of Hypothesis 3 cannot be determined based on the results; Hypothesis 2 is not valid, while Hypothesis 1 is partially not valid. The main policy implication is that governance standards need to be further improved in order for government quality to generate the expected unfavorable effects on CO2 emissions.

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