Finance, Inequality, and Poverty: Cross-Country Evidence

By Thorsten Beck, Asli Demirgüç-Kunt, Ross Levine. 2004

619 citations recorded by the source corpus.

While substantial research finds that financial development boosts overall economic growth, the authors study whether financial development is pro-poor: Does financial development disproportionately raise the income of the poor? Using a broad cross-country sample, the authors find that the answer is yes: Financial intermediary development reduces income inequality by disproportionately boosting the income of the poor and therefore reduces poverty. This result is robust to controlling for simultaneity bias and reverse causation.

Subfields: Economics and Econometrics, Information Systems, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/ef03dfbcd9b98cc6dca4ca8a2a1e860e5b396762

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Citations in the corpus

Access to Finance (2008, background): “ Beck, Levine and Levkov (2007) also explore the channels”
FINANCIAL DEVELOPMENT AND INCOME DISTRIBUTION: A SYSTEM GMM PANEL ANALYSIS WITH APPLICATION TO URBAN CHINA (2006, neutral): “In a more recent work, Beck et al. (2004) use a broad cross-country sample of 52 developing and developed countries between 1960 and 1999 to investigate the relationship between financial intermediary development and changes in income distribution.”
Financial Development and Income Inequality: Is There Any Financial Kuznets Curve in Iran? (2014, background): “t t t t a DTB b DU b u x H      2 2 1 1 : (9)”
Access to Financial Services : A Review of the Issues and Public Policy Objectives (2005, background): “Cross-country studies on the link between finance and poverty include Beck, DemirgüçKunt and Levine 2004a. Controlling for reverse causality, they find that financial development causes less income inequality.”
Will trade sanctions reduce child labour?: The role of credit markets (2002, background): “13 Table VII: Two Stages Least Squares Estimation First Scenario Second Scenario Variables (1) LGDPC (2) CHILD (3) LGDPC (4) CHILD”
Bank Branch Presence and Access to Credit in Low-to-Moderate Income Neighborhoods (2010, positive): “Cross-country studies have shown that financial development alleviates poverty and reduces income inequality (Beck, Demirguc-Kunt, and Levine, 2004).”