Financial Development, Inequality and Poverty: Some International Evidence

By Sami Ben Naceur, Ruixin Zhang. Social Science Research Network, 2016

316 citations recorded by the source corpus.

This paper provides evidence on the link between financial development and income distribution. Several dimensions of financial development are considered: financial access, efficiency, stability, and liberalization. Each aspect is represented by two indicators: one related to financial institutions, and the other to financial markets. Using a sample of 143 countries from 1961 to 2011, the paper finds that four of the five dimensions of financial development can significantly reduce income inequality and poverty, except financial liberalization, which tends to exacerbate them. Also, banking sector development tends to provide a more significant impact on changing income distribution than stock market development. Together, these findings are consistent with the view that macroeconomic stability and reforms that strengthen creditor rights, contract enforcement, and financial institution regulation are needed to ensure that financial development and liberalization fully support the reduction of poverty and income equality.

Subfields: Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/ecd67831600fc85076b97a73ff8234389335b887

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Citations in the corpus

Inequality, finance and renewable energy consumption in Sub-Saharan Africa (2021, background): “…is informed by the contemporary inclusive development literature which is consistent on the need to complement the Gini coefficient with other inequality indicators that articulate extreme points of the inequality distribution (Tchamyou et al., 2019a; Meniago & Asongu, 2018; Naceur & Zhang, 2016).”
Finance and Income Inequality: A Review and New Evidence (2017, unknown): “6 that financial sector development increases income inequality and that this impact seems to run primarily via the banking sector; Naceur and Zhang (2016) reach the same conclusion.”
Does economic globalisation affect income inequality? A meta‐analysis (2020, background): “…(2000) Dollar and Kraay (2002) Majeed (2015) Zakaria and Fida (2016) Dollar and Kraay (2004) Meschi and Vivarelli (2009) Zhuang and Griffith (2013) Dorn and Schinke (2018) Minnich (2003) Zhang and Naceur (2018) Notes: Studies published in peer-reviewed journals prior to October 2018 were included.”