Publication:
Finance and inequality in eight Asian countries: does size matter
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.
Keywords
Income inequality , Financial sector size , Asian countries
Citation
Ibrahim, M. H. (2018). Finance and inequality in eight Asian countries: does size matter. Bulletin of Monetary Economics and Banking, 21(1), 33-56. https://doi.org/10.21098/bemp.v21i1.930
Publisher
Bank Indonesia
Link Entity
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Person
Mansor H. Ibrahim
mansorhi@inceif.org
Deputy President Academic (DPA)/Dean, School of Graduate and Professional Studies