The Potency of Financial Inclusion for Income Inequality Reduction in BRICS Economies: Does Institutional Quality Matter?

Q2 Economics, Econometrics and Finance Global Journal of Emerging Market Economies Pub Date : 2024-06-07 DOI:10.1177/09749101241256095
O. G. Onatunji
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Abstract

While the global economy has witnessed robust economic performance over the past few years, millions of households remain financially deprived. This indicates that universal access to financial services is critical for the global community to achieve the United Nations’ sustainable development goals (SDGs). Although there is a burgeoning body of literature on the nexus between financial inclusion and income inequality, empirical evidence on the contribution of financial inclusion and institutional quality to income inequality remains sparse. This research, therefore, examines the effect of financial inclusion and institutional quality on income inequality in Brazil, Russia, India, China, and South Africa (BRICS) economies from 2004 to 2015. The empirical analysis employed the cross-sectional autoregressive distributed lag (CS-ARDL) and common correlated effects mean group (CCEMG) techniques to obviate cross-sectional dependency and heterogeneity concerns. The empirical outcome demonstrates that financial inclusion promotes income inequality reduction in BRICS economies in the long and short run. Additionally, improvements in institutional quality further enhance the accessibility and usage of financial services by financially excluded individuals, thereby fostering equitable income distribution in the BRICS countries. Based on these findings, BRICS economies need to increase their awareness of the available financial services, effective microfinance, financial capability, and infrastructural access in rural areas to improve financial inclusivity and thus promote equitable income distribution. JEL Classification D02, D33, E02, G21, O15
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普惠金融在金砖五国经济体中减少收入不平等的潜力:体制质量重要吗?
尽管过去几年全球经济表现强劲,但仍有数百万家庭经济拮据。这表明,普及金融服务对全球社会实现联合国可持续发展目标(SDGs)至关重要。尽管有关普惠金融与收入不平等之间关系的文献不断涌现,但有关普惠金融和机构质量对收入不平等的贡献的经验证据仍然很少。因此,本研究考察了 2004 年至 2015 年期间金融包容性和机构质量对巴西、俄罗斯、印度、中国和南非(金砖五国)经济体收入不平等的影响。实证分析采用了横截面自回归分布滞后(CS-ARDL)和共同相关效应均值组(CCEMG)技术,以消除横截面依赖性和异质性问题。实证结果表明,从长期和短期来看,金融包容性促进了金砖国家经济体收入不平等的减少。此外,制度质量的改善进一步提高了被金融排斥的个人获得和使用金融服务的机会,从而促进了金砖国家的公平收入分配。基于这些研究结果,金砖国家需要提高对现有金融服务、有效的小额信贷、金融能力和农村地区基础设施的认识,以提高金融包容性,从而促进公平的收入分配。JEL 分类 D02, D33, E02, G21, O15
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来源期刊
Global Journal of Emerging Market Economies
Global Journal of Emerging Market Economies Economics, Econometrics and Finance-Economics, Econometrics and Finance (miscellaneous)
CiteScore
2.70
自引率
0.00%
发文量
27
期刊介绍: Global Journal of Emerging Market Economies is a peer-reviewed journal. The aim of the journal is to provide an international platform for knowledge sharing, discussion and networking on the various aspects related to emerging market economies through publications of original research. It aims to make available basic reference material for policy-makers, business executives and researchers interested in issues of fundamental importance to the economic prospects and performance of emerging market economies. The topics for discussion are related to the following general categories: D. Microeconomics E. Macroeconomics and Monetary Economics F. International Economics G. Financial Economics H. Public Economics I. Health, Education, and Welfare J. Labor and Demographic Economics L. Industrial Organization O. Economic Development, Innovation, Technological Change, and Growth Q. Agricultural and Natural Resource Economics • Environmental and Ecological Economics R. Urban, Rural, Regional, Real Estate, and Transportation Economics Additionally, the journal would be most interested to publish topics related to Global Financial Crisis and the Impact on Emerging Market Economies Economic Development and Inclusive Growth Climate Change and Energy Infrastructure Development and Public Private Partnerships Capital Flows to and from Emerging Market Economies Regional Cooperation Trade and Investment and Development of National and Regional Financial Markets The Belt and Road Initiative.
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