How Does Financial Development Affect the Growth–Inequality Nexus? Evidence from a PCHVAR Analysis

IF 2.8 4区管理学 Q2 BUSINESS

Industrial and Corporate Change Pub Date : 2023-02-07 DOI:10.1093/icc/dtad007

Christian R. Proaño, Juan Carlos Peña, Sven Schnellbacher

{"title":"How Does Financial Development Affect the Growth–Inequality Nexus? Evidence from a PCHVAR Analysis","authors":"Christian R. Proaño, Juan Carlos Peña, Sven Schnellbacher","doi":"10.1093/icc/dtad007","DOIUrl":null,"url":null,"abstract":"\n While the important role of financial development for economic growth, as well as for its effect on economic inequality, has been widely acknowledged by the literature, far less attention has been put on understanding how growth and inequality may be differently influenced by alternative types of financial development. Against this background, we investigate the impact of different types of financial development on the growth–inequality nexus with a panel of 110 advanced and emerging economies and yearly data ranging from 1980 to 2016. Using the panel conditionally homogeneous vector-autoregressive (PCHVAR) model of Georgiadis (2014); Georgiadis (2012), we find that the overall level of financial development (measured by the International Monetary Fund (IMF)’s financial development index) has a significant impact on the growth–inequality nexus. Specifically, our results reveal that a higher level of overall financial development results in more equitable economic growth. Furthermore, an increase in the income share of the top 10% income earners has a significant negative impact on economic growth for low and high levels of overall financial development but is insignificant for middle levels. By looking at more disaggregated subindices of financial development, we find that economic growth increases the income share of the low 10% income earners when financial institutions and markets are deeper and financial markets are more efficient. Thus, our results call for a more differentiated view on the concept of financial development in order to derive policy measures aimed at different parts of the society.","PeriodicalId":48243,"journal":{"name":"Industrial and Corporate Change","volume":" ","pages":""},"PeriodicalIF":2.8000,"publicationDate":"2023-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Industrial and Corporate Change","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1093/icc/dtad007","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS","Score":null,"Total":0}

引用次数: 2

Abstract

While the important role of financial development for economic growth, as well as for its effect on economic inequality, has been widely acknowledged by the literature, far less attention has been put on understanding how growth and inequality may be differently influenced by alternative types of financial development. Against this background, we investigate the impact of different types of financial development on the growth–inequality nexus with a panel of 110 advanced and emerging economies and yearly data ranging from 1980 to 2016. Using the panel conditionally homogeneous vector-autoregressive (PCHVAR) model of Georgiadis (2014); Georgiadis (2012), we find that the overall level of financial development (measured by the International Monetary Fund (IMF)’s financial development index) has a significant impact on the growth–inequality nexus. Specifically, our results reveal that a higher level of overall financial development results in more equitable economic growth. Furthermore, an increase in the income share of the top 10% income earners has a significant negative impact on economic growth for low and high levels of overall financial development but is insignificant for middle levels. By looking at more disaggregated subindices of financial development, we find that economic growth increases the income share of the low 10% income earners when financial institutions and markets are deeper and financial markets are more efficient. Thus, our results call for a more differentiated view on the concept of financial development in order to derive policy measures aimed at different parts of the society.

查看原文本刊更多论文

金融发展如何影响增长-不平等关系?PCHVAR分析的证据

尽管金融发展对经济增长的重要作用及其对经济不平等的影响已被文献广泛承认，但人们对理解其他类型的金融发展如何对增长和不平等产生不同影响的关注要少得多。在此背景下，我们对110个发达和新兴经济体以及1980年至2016年的年度数据进行了调查，研究了不同类型的金融发展对增长-不平等关系的影响。使用Georgiadis（2014）的面板条件齐次向量自回归（PCHVAR）模型；Georgiadis（2012），我们发现金融发展的总体水平（以国际货币基金组织（IMF）的金融发展指数衡量）对增长-不平等关系有重大影响。具体而言，我们的研究结果表明，更高水平的整体金融发展会带来更公平的经济增长。此外，收入最高的10%收入者的收入份额的增加对整体金融发展的低水平和高水平的经济增长都有显著的负面影响，但对中等水平的人来说是微不足道的。通过研究金融发展的更多分类指标，我们发现，当金融机构和市场更深入，金融市场更有效率时，经济增长会增加低10%收入者的收入份额。因此，我们的研究结果要求对金融发展的概念有更不同的看法，以便制定针对社会不同阶层的政策措施。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Industrial and Corporate Change Multiple-

CiteScore

5.10

自引率

4.00%

发文量

期刊介绍： The journal covers the following: the internal structures of firms; the history of technologies; the evolution of industries; the nature of competition; the decision rules and strategies; the relationship between firms" characteristics and the institutional environment; the sociology of management and of the workforce; the performance of industries over time; the labour process and the organization of production; the relationship between, and boundaries of, organizations and markets; the nature of the learning process underlying technological and organizational change.