FINANCE AND INEQUALITY IN EIGHT ASIAN COUNTRIES: DOES SIZE MATTER?

Authors

Mansor Ibrahim, INCEIF, MalaysiaFollow

Document Type

Article

Abstract

The present paper seeks to assess the implications of increasing financial sector size on income inequality in eight Asian countries - Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, and South Korea. Adopting a panel data approach, it document a non-linear relation between income inequality and financial sector size in these countries. More precisely, the increasing financial sector size is favourable to equal income distribution only up until a size threshold, beyond which further expansion of the financial sector can worsen income distribution. The analysis further highlights the income-equalizing effect of economic growth and infrastructure development and the income un-equalizing effect of trade and government expenditures. These results are robust to alternative model specifications and to exclusion of a country at a time from the sample.

Recommended Citation

Ibrahim, Mansor (2018) "FINANCE AND INEQUALITY IN EIGHT ASIAN COUNTRIES: DOES SIZE MATTER?," Bulletin of Monetary Economics and Banking: Vol. 21: No. 1, Article 3.
DOI: https://doi.org/10.21098/bemp.v21i1.930
Available at: https://bulletin.bmeb-bi.org/bmeb/vol21/iss1/3

First Page

33

Last Page

56

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Malaysia

Affiliation

INCEIF