Impact of Trade and FDI on Income Inequality: A Panel Data Analysis

2021 ◽  
Vol 23 (3) ◽  
pp. 111-131
Author(s):  
Jae Hwa Lee ◽  
Woo Sung Cho
Author(s):  
Hoi Le Quoc ◽  
Hoi Chu Minh

Financial development could exert various effects on income distribution of a country. By employing Generalized Method of Moment, this paper aims at examining the impacts of credit market depth, one of most used financial development barometers, on income inequality in Vietnam. The empirical findings show that expanding credit market in the country could lead to higher income inequality. We have not found evidence that supports the hypothesis of an inverted U-shaped relation ever introduced by Greenwood and Jovanovich, although this hypothesis may still hold in a sense that Vietnam has not reached to the inflection point to generate such a curve alike.


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