{"title":"Do public and internal debt cause income inequality? Evidence from Kenya","authors":"Wilkista Lore Obi̇ero, Seher Gülşah Topuz","doi":"10.1108/jefas-05-2021-0049","DOIUrl":null,"url":null,"abstract":"PurposeThis study aims to determine whether there is an effect of internal and public debt on income inequality in Kenya for the period 1970–2018.Design/methodology/approachThe relationship is examined by using the Autoregressive Distributed Lag (ARDL) model by Pesaran et al. (2001) and Toda Yamamoto causality by Toda and Yamamoto (1995).FindingsOur findings suggest that both internal and public debt harm inequality in Kenya in the long term. Furthermore, a one-way causality from internal debt to income inequality is also obtained while no causality relationship is found to exist between public debt and income inequality. Based on these findings, the study recommends that to reduce income inequality levels in Kenya, other methods of financing other than debt financing should be preferred because debt financing is not pro-poor.Originality/valueThis study is unique based on the fact that no previous paper has analysed the debt and inequality relationship in Kenya. To the best of our knowledge, this will be the first study to analyse the applicability of redistribution effect of debt in Kenya. The study is also different in that it provides separate analysis for public debt and internal debt on their effects on income inequality.","PeriodicalId":53491,"journal":{"name":"Journal of Economics, Finance and Administrative Science","volume":"70 1","pages":""},"PeriodicalIF":2.3000,"publicationDate":"2021-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"5","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economics, Finance and Administrative Science","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/jefas-05-2021-0049","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 5
Abstract
PurposeThis study aims to determine whether there is an effect of internal and public debt on income inequality in Kenya for the period 1970–2018.Design/methodology/approachThe relationship is examined by using the Autoregressive Distributed Lag (ARDL) model by Pesaran et al. (2001) and Toda Yamamoto causality by Toda and Yamamoto (1995).FindingsOur findings suggest that both internal and public debt harm inequality in Kenya in the long term. Furthermore, a one-way causality from internal debt to income inequality is also obtained while no causality relationship is found to exist between public debt and income inequality. Based on these findings, the study recommends that to reduce income inequality levels in Kenya, other methods of financing other than debt financing should be preferred because debt financing is not pro-poor.Originality/valueThis study is unique based on the fact that no previous paper has analysed the debt and inequality relationship in Kenya. To the best of our knowledge, this will be the first study to analyse the applicability of redistribution effect of debt in Kenya. The study is also different in that it provides separate analysis for public debt and internal debt on their effects on income inequality.
期刊介绍:
The Universidad ESAN, with more than 50 years of experience in the higher education field and post graduate studies, desires to contribute to the academic community with the most outstanding pieces of research. We gratefully welcome suggestions and contributions from business areas such as operations, supply chain, economics, finance and administration. We publish twice a year, six articles for each issue.