{"title":"Financial Development and Income Inequality in Newly Industrialized Countries: Does Financial Kuznets Curve Exists?","authors":"","doi":"10.1007/s13132-023-01705-y","DOIUrl":null,"url":null,"abstract":"<h3>Abstract</h3> <p>The aim of this study is to test the validity of the classical Kuznets curve and financial Kuznets curve (FKC) hypotheses. In addition, in this study, the relationship between financial development and income inequality is discussed, the effect of financial development on income inequality is empirically explored, and policy recommendations are made within the framework of the analysis in 10 newly ındustrialized countries. The annual data spanning 1985–2019 were collected to examine the nexus among financial development, per capita GDP, and income inequality. Moreover, control variables of government expenditures, urban population, foreign direct investment, and economic globalization index were added to the empirical model as explanatory variables. Income inequality is measured by Gini coefficient. Panel autoregressive distributed lag model (Panel ARDL) and panel generalized moment method-system (Panel GMM) were used in the analyses. According to the results obtained in the study, while economic globalization increases income inequality, government expenditures, and urban population and foreign direct investments reduce income inequality. However, while GDP and financial development itself increased the Gini coefficient, it decreased the squares. Therefore, it is concluded that both classical Kuznets curve and financial Kuznets curve hypotheses are valid for newly ındustrialized countries. It is possible that the findings obtained in the analysis will be used by the policy makers of these countries for the development of financial systems in order to reduce inequality. Increasing the efficiency of the financial sector with structural regulations and various incentive policies is important for countries with financially underdeveloped.</p>","PeriodicalId":47435,"journal":{"name":"Journal of the Knowledge Economy","volume":"82 1","pages":""},"PeriodicalIF":4.0000,"publicationDate":"2024-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of the Knowledge Economy","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s13132-023-01705-y","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
The aim of this study is to test the validity of the classical Kuznets curve and financial Kuznets curve (FKC) hypotheses. In addition, in this study, the relationship between financial development and income inequality is discussed, the effect of financial development on income inequality is empirically explored, and policy recommendations are made within the framework of the analysis in 10 newly ındustrialized countries. The annual data spanning 1985–2019 were collected to examine the nexus among financial development, per capita GDP, and income inequality. Moreover, control variables of government expenditures, urban population, foreign direct investment, and economic globalization index were added to the empirical model as explanatory variables. Income inequality is measured by Gini coefficient. Panel autoregressive distributed lag model (Panel ARDL) and panel generalized moment method-system (Panel GMM) were used in the analyses. According to the results obtained in the study, while economic globalization increases income inequality, government expenditures, and urban population and foreign direct investments reduce income inequality. However, while GDP and financial development itself increased the Gini coefficient, it decreased the squares. Therefore, it is concluded that both classical Kuznets curve and financial Kuznets curve hypotheses are valid for newly ındustrialized countries. It is possible that the findings obtained in the analysis will be used by the policy makers of these countries for the development of financial systems in order to reduce inequality. Increasing the efficiency of the financial sector with structural regulations and various incentive policies is important for countries with financially underdeveloped.
期刊介绍：
In the context of rapid globalization and technological capacity, the world’s economies today are driven increasingly by knowledge—the expertise, skills, experience, education, understanding, awareness, perception, and other qualities required to communicate, interpret, and analyze information. New wealth is created by the application of knowledge to improve productivity—and to create new products, services, systems, and process (i.e., to innovate). The Journal of the Knowledge Economy focuses on the dynamics of the knowledge-based economy, with an emphasis on the role of knowledge creation, diffusion, and application across three economic levels: (1) the systemic ''meta'' or ''macro''-level, (2) the organizational ''meso''-level, and (3) the individual ''micro''-level. The journal incorporates insights from the fields of economics, management, law, sociology, anthropology, psychology, and political science to shed new light on the evolving role of knowledge, with a particular emphasis on how innovation can be leveraged to provide solutions to complex problems and issues, including global crises in environmental sustainability, education, and economic development. Articles emphasize empirical studies, underscoring a comparative approach, and, to a lesser extent, case studies and theoretical articles. The journal balances practice/application and theory/concepts.
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