scholarly journals The Impact of Financial Inclusion on Economic Growth and Income Inequality

2021 ◽  
Vol 10 (2) ◽  
pp. 1971-1999
Author(s):  
Gerçek ÖZPARLAK ◽  
Aslı ÖZHAN
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Inclusion ◽  
The Impact

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.

The impact of foreign direct investment on urban-rural income inequality

2016 ◽  
Vol 8 (3) ◽  
pp. 480-497 ◽  
Author(s):  
Chunlai Chen
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Income Inequality ◽  
Fixed Effects ◽  
Knowledge Spillovers ◽  
Employment Creation ◽  
Content Type ◽  
Rural Income ◽  
Urban Rural ◽  
The Impact

Purpose The purpose of this paper is to analyse the impact of foreign direct investment (FDI) on urban-rural income inequality in China. Design/methodology/approach This study uses the provincial-level panel data and employs the fixed-effects instrumental variable regression technique to investigate empirically the impact of FDI on urban-rural income inequality in China. Findings The study finds that while FDI has directly contributed to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, FDI has also contributed to increasing urban-rural income inequality through international trade. Practical implications The study has some policy implications. First, as the study finds that FDI not only contributes to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, but also contributes to increasing urban-rural income inequality through international trade, therefore, apart from improving local economic and technological conditions to attract more FDI inflows, China should re-design FDI policies by shifting away from encouraging export-oriented FDI to encouraging FDI flows into the industries and sectors in line with China’s overall economic structural adjustments and industrial upgrading. Second, policies should focus on increasing investment in infrastructure development and in public education, which not only can reduce urban-rural income inequality but also can attract more FDI inflows. And finally policies should be designed to accelerate urbanisation development by focusing on urban-rural integrated development, household registration system reform and proper settlement of rural migrants in urban areas, thus reducing urban-rural income inequality. Originality/value The paper makes two major contributions to the literature. First, the paper adopts the fixed-effects instrumental variable regression technique to deal with the endogeneity issues in estimating the impact of FDI on urban-rural income inequality, producing more consistent estimates. Second, the paper investigates not only the direct impact of FDI on urban-rural income inequality through the effects of employment creation, knowledge spillovers and contribution to economic growth, but also the indirect impact of FDI on urban-rural income inequality through its activities in international trade, adding new empirical evidence to the sparse literature on the impact of FDI on income inequality in China.

On the Impact of Government Institutions on Economic Growth and Income Inequality in Russia

2019 ◽  
Vol 7 (3) ◽  
pp. 14-17
Author(s):  
Леонид Басовский ◽  
Leonid Basovskiy ◽  
В. Бабанов ◽  
V. Babanov ◽  
Елена Басовская ◽  
...  
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Income Distribution ◽  
Local Governments ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Government Officials ◽  
Government Institutions ◽  
State And Local ◽  
The Impact

In order to assess the extent to which the institutions of government in the current conditions in recent years in Russia — the activity of government officials and local governments affected economic growth, the correlation of the number of this category of workers with the growth rates of the economy was evaluated. The results show that by 2002 the positive correlation between the number of employees of state bodies and local self-government and the rate of economic growth was a negative one. The activities of employees of state and local governments began to slow down economic growth in the country. In order to assess how the change in the level of inequality of income distribution in modern Russia is due to the activities of employees of state-shock authorities and local self-government, its relation to the number of employees in this category of funds, which reflects the degree of income inequality, was evaluated. The results show that by 2011 the negative relationship between the number of employees of state bodies and local governments and the level of inequality of income distribution of growth replaced by a positive relationship. The activities of employees of state and local governments began to contribute to reducing the level of inequality of income distribution in the country.

scholarly journals Financial Inclusion and Demand for Money: a Dynamic Panel Data Approach

2018 ◽  
Vol 7 (2) ◽  
pp. 137-148
Author(s):  
Zelin Nurfadia Sidik ◽  
Noer Azam Achsani ◽  
Syamsul Hidayat Pasaribu
Keyword(s):  
Economic Growth ◽  
Financial Institution ◽  
Developed Countries ◽  
Dynamic Panel Data ◽  
Financial Inclusion ◽  
The Other ◽  
Demand For Money ◽  
Dynamic Panel ◽  
On Demand ◽  
The Impact

Financial inclusion is designed to increase the opportunities and society participation in the formal financial institution, especially for unbanked people. Moreover, financial inclusion is one of strategy inclusive economic growth. However, financial inclusion may lead an ineffectiveness of monetary policy. It is because financial inclusion can affect the sensitivity of interest rate, and it could cause instability demand for money. Therefore, the research aims to analyze the impact of financial inclusion on demand for money, reserve money (M0), in 36 countries for the period 2004 to 2014. The method that used is Dynamic Panel Approach. The result shows that financial inclusion stimulates the increase of demand for reserve money (M0) in developed countries. In the other hand, the increasing of financial inclusion could decrease the demand for reserve money (M0) in developing countries.DOI: 10.15408/sjie.v7i2.6838

scholarly journals THE CO-INTEGRATING RELATIONSHIP BETWEEN FINANCIAL INCLUSION AND ECONOMIC GROWTH IN THE SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

2021 ◽  
Vol 9 (3) ◽  
pp. 170-188
Author(s):  
Oscar Chiwira ◽  
Keyword(s):  
Economic Growth ◽  
Negative Impact ◽  
Negative Relationship ◽  
Financial Inclusion ◽  
Information And Communications Technology ◽  
Broadband Internet ◽  
Distributed Lag ◽  
Long Run ◽  
Financial Monitoring ◽  
The Impact

This study examines the relationship between financial inclusion and economic growth in SADC. It uses panel data covering the period between 1995 to 2015 and employs the Autoregressive Distributed Lag (ARDL) Bounds and the Toda and Yamamoto and Dolado and Lutkepohl (TYDL) models to examine the co-integrating relationship and the direction of causality respectively. The impact of financial inclusion on economic growth, when measured by the mobile penetration rate and the number of bank branches, diminishes in the long run to an extent of having a negative relationship with economic growth. This implies possible thresholds beyond which a negative impact on economic growth is realized. The long-run influence of financial inclusion on economic growth is hinged on financial technologies, measured by fixed broadband internet services, which have great potential to foster unique financial inclusion and shift the economic paradigm, leading to a digitalized economy. Only financial inclusion initiatives that result in increased bank deposit accounts promote economic growth. SADC is encouraged to liberalize its information and communications technology sector in order to fully benefit from financial inclusion initiatives. In addition, SADC should consider embracing international financial monitoring standards so that it does not fall behind the inevitable integration of the financial sectors.

scholarly journals Innovations in achieving sustainable economic performance under income inequality

2021 ◽  
Vol 5 (2) ◽  
pp. 146-154
Author(s):  
Inna Cabelkova ◽  
Manuela Tvaronaviciene ◽  
Wadim Strielkowski
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Income Inequality ◽  
Economic Performance ◽  
Financial Services ◽  
Developing Economies ◽  
Well Being ◽  
Middle Income ◽  
Middle Income Countries ◽  
The Impact

The negative effect of income inequality on economic growth represents a topic that constitutes a broad topic of research in the standard economic theory. One of the immediate consequences of income inequality is diminished consumption. Many «poor» customers cannot provide sufficient demand for the producers, causing overproduction that might lead to an economic crisis. It constitutes a problem because sustainable economic performance needs to be achieved under the conditions of income inequality. Reducing social and economic inequality in countries is an essential step towards ensuring that no one is left behind. It is also part of the 10th Sustainable Development Goal aimed to reduce it by 2030. Inequality is based on the income distribution between the top 1% and the bottom 99% of households in any given country. The degree of inequality could play a beneficial role if it is driven by market forces and is associated with incentives to increase growth. In developing and emerging countries, greater equality and improvements in living standards are needed to enable populations to flourish. Inequality reduction is one of the most critical steps a government could take to improve the well-being of its population. The income inequality growth increases human capital in poor countries and reduces it in high and middle-income countries. In poorer countries, it increases them, but in higher – and middle-income countries, it reduces them. Income inequality could be reduced by improving human capital and general skill levels, correcting labor-market policies, and making better use of financial services. In turn, sustainable economic growth could reverse the negative effects of inequality, reducing the need for high-wage and higher-earning households. Thus, it provides higher economic growth. This paper discusses three ways to circumvent the impact of decreasing consumption on economic growth adopted in developing economies over the last fifty years, such as increasing exports, providing loans for consumption, and printing new money. The findings showed that none of these methods seem to be sustainable in the long run. Thus novel and innovative mechanisms that would allow our economy to reduce inequality are necessary and need to be put into place.

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