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The Relationship of Financial Liberalization and Income Distribution: Panel Quantile Regression Analysis for G10 Countries

Year 2021, Volume: 5 Issue: Uluslararası İktisadi ve İdari Bilimler Kongresi: Krizler, Belirsizlikler ve Arayışlar Özel Sayısı, 11 - 30, 31.12.2021
https://doi.org/10.33399/biibfad.1029345

Abstract

The aim of this study is to examine the effect of financial liberalization and selected control variables (trade openness, economic growth, R&D expenditures and public expenditures) on income inequality in selected G10 countries between 1997-2019. On income inequality data obtained from the Standardized World Income Inequality Database and the effect of trade, economic growth, R&D expenditures and public expenditures control variables, as well as Smt (stock market turnover rate) and Smc (stock exchange capitalization rate) has been researched by using the panel quantile regression model. When the panel quantile results are examined, it has been determined that trade openness, smt, R&D expenditures and public expenditures have a reducing effect on income inequality, while economic growth and Smc have an increasing effect on income inequality. Empirical results show that, in accordance with the literature, the uncertain effect of financial liberalization on income inequality continues. Contrasting results were obtained on income inequality of the two selected financial liberalization variables. Contrasting results were obtained on income inequality of the two selected financial liberalization variables. In addition, as income inequality increases in selected developed countries, the distorting effect of economic growth on income distribution increases. On the other hand, it is seen that government expenditures have a regulatory effect on income distribution, while R&D expenditures have a regulatory effect on inequality, and R&D expenditures have the highest regulatory effect on income distribution at a high level of inequality.

References

  • Ağır, H., Türkmen, S., & Özbek, S (2020). Finansal Kuznets Eğrisi Yaklaşımı Çerçevesinde Finansallaşma ve Gelir Eşitsizliği İlişkisi: E7 Ülkeleri Üzerine Ekonometrik Bir Tahmin. Bilgi Ekonomisi ve Yönetimi Dergisi, 15(2), 71-84.
  • Alharthi, M., Dogan, E., & Taskin, D. (2021). Analysis of CO2 emissions and energy consumption by sources in MENA countries: evidence from quantile regressions. Environmental Science and Pollution Research, 1-8.
  • Asteriou, D., Dimelis, S., & Moudatsou, A. (2014). Globalization and income inequality: A panel data econometric approach for the EU27 countries. Economic Modelling, 36, 592-599.
  • Banerjee, A.V., & Newman, A.F. (1993). Occupational choice and the process of development. Journal of Political Economy, 101(2), 274-298.
  • Binder, M., & Coad, A. (2011). From average Joe’s happiness to Miserable Jane and Cheerful John: using quantile regressions to analyze the full subjective well-being distribution. Journal of Economic Behavior & Organization, 79(3), 275-290.
  • Bumann, S., & Lensick, R. (2013). Financial liberalization and income inequality: Channels and cross-country evidence. Working paper, University of Groningen, Department of Economics, Econometrics and Finance, The Netherlands.
  • Clarke, G.R., Xu, L.C., & Zou, H.F. (2006). Finance and income inequality: what do the data tell us?. Southern Economic Journal, 72(3), 578-596.
  • De Haan, J., & Sturm, J.E. (2017). Finance and income inequality: A review and new evidence. European Journal of Political Economy, 50, 171-195.
  • De Haan, J., Pleninger, R., & Sturm, J. E. (2018). Does the impact of financial liberalization on income inequality depend on financial development? Some new evidence. Applied Economics Letters, 25(5), 313-316.
  • Enowbi Batuo, M., Guidi, F., & Mlambo, K. (2010). Financial development and income inequality: Evidence from African Countries, MPRA Paper, No: 25658. (http://mpra.ub.uni-muenchen.de/25658).
  • Furceri, D., & Loungani, M.P. (2015). Capital account liberalization and inequality. International Monetary Fund.
  • Galor, O., & Zeira, J. (1993). Income distribution and macroeconomics. The Review of Economic Studies, 60(1), 35-52.
  • Greenwood, J., & Jovanovic, B. (1990). Financial development, growth, and the distribution of income. Journal of Political Economy, 98(5, Part 1), 1076-1107.
  • Im, K.S., Pesaran, M.H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53-74.
  • Jauch, S., & Watzka, S. (2016). Financial development and income inequality: a panel data approach. Empirical Economics, 51(1), 291-314.
  • Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics 90: 1-44.
  • Kappel, V. (2010). The effects of financial development on income inequality and poverty. CER-ETH-Center of Economic Research at ETH Zurich, Working Paper, (10/127).
  • Kar, B.B., & Kar M. (2019). Finansal gelişme ve gelir eşitsizliği: BRICS ekonomileri için dinamik heterojen bir yaklaşım. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 19(1), 27-46.
  • Kim, D.H., Hsieh, J., & Lin, S.C. (2021). Financial liberalization, political institutions, and income inequality. Empirical Economics, 60(3), 1245-1281.
  • Koenker, R. (2004). Quantile regression for longitudinal data. Journal of Multivariate Analysis, 91(1), 74-89.
  • Koenker, R., & Bassett Jr, G. (1978). Regression quantiles. Econometrica: Journal of the Econometric Society, 46(1), 33-50.
  • Konukman, A., & Çiftçi, C. (2008). Küreselleşmenin gelir dağılımı üzerindeki. Ekonomik Yaklaşım, 19(1), 59-83.
  • Kuznets, S. (1955). Economic growth and income inequality. The American Economic, 45 (1), 1–28.
  • Lamarche, C. (2010). Robust penalized quantile regression estimation for panel data. Journal of Econometrics, 157(2), 396-408.
  • Levine, R. (2005). Finance and growth: theory and evidence. Handbook of Economic Growth, 1, 865-934.
  • Moosa, I. (2016). International evidence on the financial Kuznets curve. Economia Internazionale/International Economics, 69(4), 365-78.
  • Özdemir, O. (2019). Autoregressive Distributed lag approach to the income inequality and financial liberalization nexus: empirical evidence from Turkey. International Journal of Economics and Financial Issues, 9(6), 1.
  • Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61: 653-670.
  • Pedroni, P. (2004). Panel cointegration: Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20: 597-625.
  • Rehman, H.U., Khan, S., & Ahmed, I. (2008). Income distribution, growth and financial development: A cross countries analysis. Pakistan Economic and Social Review, 46(1), 1-16.
  • Shahbaz, M., Loganathan, N., Tiwari, A.K., & Sherafatian-Jahromi, R. (2015). Financial development and income inequality: Is there any financial Kuznets curve in Iran?. Social Indicators Research, 124(2), 357-382.
  • Sherwood, B., & Wang, L. (2016). Partially linear additive quantile regression in ultra-high dimension. The Annals of Statistics, 44(1), 288-317.
  • Solt, F. (2009). Standardizing the world income inequality database. Social Science Quarterly, (SWIID v.9.1) 90(2), 231-242.
  • Tan, H.B., & Law, S.H. (2012). Nonlinear dynamics of the finance-inequality nexus in developing countries. The Journal of Economic Inequality, 10(4), 551-563.
  • Tita, A.F., & Aziakpono, M.J. (2016). Financial development and income inequality in Africa: A panel heterogeneous approach. Economic Research Southern Africa. Working Papers, 614.
  • Topuz, S.G., & Dağdemir, Ö. (2016). Finansal gelişme ve gelir eşitsizliği: bir panel veri analizi. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 16(3), 19-34.
  • WB-GFDD: Global Financial Development Database (2021) https://www.worldbank.org/en/publication/gfdr/data/global-financial-development-database.
  • WDI: World Development Indicators. https://datacatalog.worldbank.org/dataset/world-development-indicators
  • Westerlund, J. (2005). New simple tests for panel cointegration. Econometric Reviews, 24: 297-316.
  • Yan, D., Kong, Y., Ren, X., Shi, Y., & Chiang, S. (2019). The determinants of urban sustainability in Chinese resource-based cities: A panel quantile regression approach. Science of the total environment, 686, 1210-1219.

Finansal Liberalizasyon ve Gelir Dağılımı İlişkisi: G 10 Ülkeleri için Panel Kantil Regresyon Analizi

Year 2021, Volume: 5 Issue: Uluslararası İktisadi ve İdari Bilimler Kongresi: Krizler, Belirsizlikler ve Arayışlar Özel Sayısı, 11 - 30, 31.12.2021
https://doi.org/10.33399/biibfad.1029345

Abstract

Bu çalışmanın amacı, seçilmiş G10 ülkelerinde finansal serbestleşmenin ve seçilen kontrol değişkenlerin (ticari açıklık, ekonomik büyüme, Ar-Ge harcamaları ve kamu harcamaları) gelir eşitsizliği üzerindeki etkisinin 1997-2019 yılları arasında incelemektir. Panel kantil regresyon modeli kullanılarak Standartlaştırılmış Dünya Gelir Eşitsizliği Veri tabanınından elde edilen gelir eşitsizliği verisi üzerinde finansal serbesleşme değişkeni olarak seçilen Smt (borsa ciro oranı) ve Smc (borsa kapitalizasyon oranı)’nin yanında ticaret, ekonomik büyüme, Ar-Ge harcamaları ve kamu harcamaları kontrol değişkenlerinin etkisi araştırılmıştır. Panel kantil sonuçları incelendiğinde, ticari açıklık, smt, Ar-Ge harcamaları ve kamu harcamalarının gelir eşitsizliğini azaltıcı bir etkiye sahip oldukları, ekonomik büyümenin ve Smc’nin ise, gelir eşitsizliğini arttırıcı bir etkiye sahip oldukları tespit edilmiştir. Ampirik sonuçlar, literatüre uygun olarak finansal serbestleşmenin gelir eşitsizliği üzerindeki belirsiz etkisinin devam ettiğini göstermektedir. Seçilen iki finansal serbestleşme değişkenlerinin gelir eşitsizliği üzerinde birbirinin zıttı sonuçlar elde edilmiştir. Ayrıca seçilen gelişmiş ülkelerde gelir eşitsizliği arttıkça ekonomik büyümenin gelir dağılımı üzerindeki bozucu etkisi artmaktadır. Diğer taraftan hükümet harcamalarının gelir dağılımında düzenleyici bir etkiye sahip olduğu görülürken, Ar-Ge harcamalarının da eşitsizlik üzerindeki düzenleyici etkisinin olduğu görülmektedir ve Ar-Ge harcamaları yüksek eşitsizlik seviyesinde gelir dağılımı üzerinde en yüksek düzenleyici etkiye sahiptir. 

References

  • Ağır, H., Türkmen, S., & Özbek, S (2020). Finansal Kuznets Eğrisi Yaklaşımı Çerçevesinde Finansallaşma ve Gelir Eşitsizliği İlişkisi: E7 Ülkeleri Üzerine Ekonometrik Bir Tahmin. Bilgi Ekonomisi ve Yönetimi Dergisi, 15(2), 71-84.
  • Alharthi, M., Dogan, E., & Taskin, D. (2021). Analysis of CO2 emissions and energy consumption by sources in MENA countries: evidence from quantile regressions. Environmental Science and Pollution Research, 1-8.
  • Asteriou, D., Dimelis, S., & Moudatsou, A. (2014). Globalization and income inequality: A panel data econometric approach for the EU27 countries. Economic Modelling, 36, 592-599.
  • Banerjee, A.V., & Newman, A.F. (1993). Occupational choice and the process of development. Journal of Political Economy, 101(2), 274-298.
  • Binder, M., & Coad, A. (2011). From average Joe’s happiness to Miserable Jane and Cheerful John: using quantile regressions to analyze the full subjective well-being distribution. Journal of Economic Behavior & Organization, 79(3), 275-290.
  • Bumann, S., & Lensick, R. (2013). Financial liberalization and income inequality: Channels and cross-country evidence. Working paper, University of Groningen, Department of Economics, Econometrics and Finance, The Netherlands.
  • Clarke, G.R., Xu, L.C., & Zou, H.F. (2006). Finance and income inequality: what do the data tell us?. Southern Economic Journal, 72(3), 578-596.
  • De Haan, J., & Sturm, J.E. (2017). Finance and income inequality: A review and new evidence. European Journal of Political Economy, 50, 171-195.
  • De Haan, J., Pleninger, R., & Sturm, J. E. (2018). Does the impact of financial liberalization on income inequality depend on financial development? Some new evidence. Applied Economics Letters, 25(5), 313-316.
  • Enowbi Batuo, M., Guidi, F., & Mlambo, K. (2010). Financial development and income inequality: Evidence from African Countries, MPRA Paper, No: 25658. (http://mpra.ub.uni-muenchen.de/25658).
  • Furceri, D., & Loungani, M.P. (2015). Capital account liberalization and inequality. International Monetary Fund.
  • Galor, O., & Zeira, J. (1993). Income distribution and macroeconomics. The Review of Economic Studies, 60(1), 35-52.
  • Greenwood, J., & Jovanovic, B. (1990). Financial development, growth, and the distribution of income. Journal of Political Economy, 98(5, Part 1), 1076-1107.
  • Im, K.S., Pesaran, M.H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53-74.
  • Jauch, S., & Watzka, S. (2016). Financial development and income inequality: a panel data approach. Empirical Economics, 51(1), 291-314.
  • Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics 90: 1-44.
  • Kappel, V. (2010). The effects of financial development on income inequality and poverty. CER-ETH-Center of Economic Research at ETH Zurich, Working Paper, (10/127).
  • Kar, B.B., & Kar M. (2019). Finansal gelişme ve gelir eşitsizliği: BRICS ekonomileri için dinamik heterojen bir yaklaşım. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 19(1), 27-46.
  • Kim, D.H., Hsieh, J., & Lin, S.C. (2021). Financial liberalization, political institutions, and income inequality. Empirical Economics, 60(3), 1245-1281.
  • Koenker, R. (2004). Quantile regression for longitudinal data. Journal of Multivariate Analysis, 91(1), 74-89.
  • Koenker, R., & Bassett Jr, G. (1978). Regression quantiles. Econometrica: Journal of the Econometric Society, 46(1), 33-50.
  • Konukman, A., & Çiftçi, C. (2008). Küreselleşmenin gelir dağılımı üzerindeki. Ekonomik Yaklaşım, 19(1), 59-83.
  • Kuznets, S. (1955). Economic growth and income inequality. The American Economic, 45 (1), 1–28.
  • Lamarche, C. (2010). Robust penalized quantile regression estimation for panel data. Journal of Econometrics, 157(2), 396-408.
  • Levine, R. (2005). Finance and growth: theory and evidence. Handbook of Economic Growth, 1, 865-934.
  • Moosa, I. (2016). International evidence on the financial Kuznets curve. Economia Internazionale/International Economics, 69(4), 365-78.
  • Özdemir, O. (2019). Autoregressive Distributed lag approach to the income inequality and financial liberalization nexus: empirical evidence from Turkey. International Journal of Economics and Financial Issues, 9(6), 1.
  • Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61: 653-670.
  • Pedroni, P. (2004). Panel cointegration: Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20: 597-625.
  • Rehman, H.U., Khan, S., & Ahmed, I. (2008). Income distribution, growth and financial development: A cross countries analysis. Pakistan Economic and Social Review, 46(1), 1-16.
  • Shahbaz, M., Loganathan, N., Tiwari, A.K., & Sherafatian-Jahromi, R. (2015). Financial development and income inequality: Is there any financial Kuznets curve in Iran?. Social Indicators Research, 124(2), 357-382.
  • Sherwood, B., & Wang, L. (2016). Partially linear additive quantile regression in ultra-high dimension. The Annals of Statistics, 44(1), 288-317.
  • Solt, F. (2009). Standardizing the world income inequality database. Social Science Quarterly, (SWIID v.9.1) 90(2), 231-242.
  • Tan, H.B., & Law, S.H. (2012). Nonlinear dynamics of the finance-inequality nexus in developing countries. The Journal of Economic Inequality, 10(4), 551-563.
  • Tita, A.F., & Aziakpono, M.J. (2016). Financial development and income inequality in Africa: A panel heterogeneous approach. Economic Research Southern Africa. Working Papers, 614.
  • Topuz, S.G., & Dağdemir, Ö. (2016). Finansal gelişme ve gelir eşitsizliği: bir panel veri analizi. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 16(3), 19-34.
  • WB-GFDD: Global Financial Development Database (2021) https://www.worldbank.org/en/publication/gfdr/data/global-financial-development-database.
  • WDI: World Development Indicators. https://datacatalog.worldbank.org/dataset/world-development-indicators
  • Westerlund, J. (2005). New simple tests for panel cointegration. Econometric Reviews, 24: 297-316.
  • Yan, D., Kong, Y., Ren, X., Shi, Y., & Chiang, S. (2019). The determinants of urban sustainability in Chinese resource-based cities: A panel quantile regression approach. Science of the total environment, 686, 1210-1219.
There are 40 citations in total.

Details

Primary Language Turkish
Subjects Economics
Journal Section Makaleler
Authors

Koray Uygur 0000-0003-0795-9348

Volkan Han 0000-0003-3180-4186

Early Pub Date December 31, 2021
Publication Date December 31, 2021
Submission Date November 27, 2021
Published in Issue Year 2021 Volume: 5 Issue: Uluslararası İktisadi ve İdari Bilimler Kongresi: Krizler, Belirsizlikler ve Arayışlar Özel Sayısı

Cite

APA Uygur, K., & Han, V. (2021). Finansal Liberalizasyon ve Gelir Dağılımı İlişkisi: G 10 Ülkeleri için Panel Kantil Regresyon Analizi. Bingöl Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 5(Uluslararası İktisadi ve İdari Bilimler Kongresi: Krizler, Belirsizlikler ve Arayışlar Özel Sayısı), 11-30. https://doi.org/10.33399/biibfad.1029345


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