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1 – 10 of over 1000
Article
Publication date: 18 January 2013

Aviral Kumar Tiwari, Muhammad Shahbaz and Faridul Islam

The purpose of this paper is to investigate the impact of financial development on the rural‐urban income inequality in India using annual data from 1965 to 2008.

2384

Abstract

Purpose

The purpose of this paper is to investigate the impact of financial development on the rural‐urban income inequality in India using annual data from 1965 to 2008.

Design/methodology/approach

The Ng‐Perron unit root test is utilised to check for the order of integration of the variables. The long run relation is examined by implementing the ARDL bounds testing approach to cointegration.

Findings

The results confirm a relation among the variables. Evidence suggest that financial development, economic growth and consumer prices aggravate rural‐urban income inequality in the long run.

Research limitations/implications

The present study offers fresh insights to policy makers on crafting appropriate policies that reduce rural‐urban income inequality in India.

Originality/value

The contribution of this paper is lies in extending the literature in the context of India towards an extensively researched area of rural‐urban divide but in time series framework and utilization of a better approach of time series approach, i.e. ARDL. Specifically, to the best of the authors' knowledge, this is the first empirical study to test poverty‐finance nexus using the basic principles of the GJ hypothesis and provide evidence of short‐ and long‐run dynamics on the postulated relation for India.

Details

International Journal of Social Economics, vol. 40 no. 2
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 10 October 2016

Madhu Sehrawat and A.K. Giri

The purpose of this paper is to examine the relationship between financial development and rural-urban income inequality (INQ) in South Asian Association for Regional Cooperation…

1545

Abstract

Purpose

The purpose of this paper is to examine the relationship between financial development and rural-urban income inequality (INQ) in South Asian Association for Regional Cooperation (SAARC) countries using panel data from 1986-2012.

Design/methodology/approach

The stationarity properties are checked by the LLC and IPS panel unit root tests. The paper applied the Pedroni’s panel co-integration test to examine the existence of the long-run relationship and coefficients of co-integration are examined by fully modified ordinary least squares. The short-term and long-run causality is examined by panel Granger causality.

Findings

The results of Pedroni co-integration test indicate that there exists a long-run relationship among the variables. The findings suggest that financial development increases rural-urban inequality whereas trade openness reduces rural-urban inequality. The empirical results of panel Granger causality indicate evidence of short-run causality confirms that economic growth and financial development causes rural-urban INQ.

Research limitations/implications

The present study recommends for appropriate economic and financial reforms focusing on financial inclusion to reduce rural-urban INQ in SAARC countries. Financial policies geared toward agriculture and rural population should be adopted to reduce the prevailing rural-urban INQ in SAARC region.

Originality/value

Till date, there is hardly any study exploring the causal relationship between financial development and rural-urban INQ for SAARC countries by using panel co-integration and causality techniques. So the contribution of the paper is to fill these research gaps in the literature.

Details

International Journal of Social Economics, vol. 43 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 February 2005

Shujie Yao, Zongyi Zhang and Gengfu Feng

Fast growth in China has led to significant improvement in people's living standards and average income. However, it has also brought about a huge rise in inequality. The purpose…

4206

Abstract

Purpose

Fast growth in China has led to significant improvement in people's living standards and average income. However, it has also brought about a huge rise in inequality. The purpose of this paper is to analyse regional and rural‐urban inequality using a few income and consumption indicators.

Design/methodology/approach

Data are collected from official statistical sources for all the Chinese provinces over 1978‐1995. Both parametric and non‐parametric methods are used to study the inequality between regions and between the rural and urban sub‐populations. The parametric approach is to test whether per capita incomes among provinces converged over time. The non‐parametric approach is the calculation and decomposition of the Gini coefficient by population sub‐group and income source.

Findings

The results show no evidence of growth convergence in per capita GDP, income and expenditure across provinces, but clear evidence of divergence in per capita rural (and urban) incomes and total expenditures. Three‐quarters of inter‐provincial income inequality are explained by inter‐rural/urban inequality. Inter‐provincial inequality explains more than half of rural inequality and less than half of urban inequality in most years.

Originality/value

This paper uses one of the most complicated datasets for the Chinese regions. It studies inequality using different economic indicators. It considers the different dimensions of inequality in China using two different approaches. The results are important for regional development policies.

Details

Journal of Economic Studies, vol. 32 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 2 October 2017

Varun Chotia and N.V.M. Rao

The purpose of this paper is to investigate the relationship between infrastructure development, rural–urban income inequality and poverty for BRICS economies.

1274

Abstract

Purpose

The purpose of this paper is to investigate the relationship between infrastructure development, rural–urban income inequality and poverty for BRICS economies.

Design/methodology/approach

Pedroni’s panel co-integration test and panel dynamic ordinary least squares (PDOLS) have been used to carry out the analysis.

Findings

The empirical findings confirm a long-run relationship among infrastructure development, poverty and rural–urban inequality. The PDOLS results suggest that both infrastructure development and economic growth lead to poverty reduction in BRICS. However, rural–urban income inequality aggravates poverty in these nations. The paper advocates for adopting policies aimed at strengthening infrastructure and achieving economic growth to reduce the current levels of poverty prevailing in the BRICS nations.

Originality/value

Significant limitations exist in the literature in terms of not clearly defining the nature of relationship and interlinkages between infrastructure development, poverty and inequality, with regard to the BRICS nations. The available studies mainly focus on the relationship between infrastructure and growth, with the universal agreement being that these two are positively related. However, it is still not right to assume that economic growth attributable to infrastructure development will, therefore, subsequently lead to a reduction in inequality. This forms the basis for this study, that is, to critically examine the relationship between infrastructure development, inequality and poverty for BRICS nations.

Article
Publication date: 4 December 2017

Atul Mehta and Joysankar Bhattacharya

The purpose of this paper is to examine the direct (microcredit), medium-direct (bank credit), and indirect (through economic growth) effect of financial sector development (FSD…

Abstract

Purpose

The purpose of this paper is to examine the direct (microcredit), medium-direct (bank credit), and indirect (through economic growth) effect of financial sector development (FSD) on rural-urban consumption inequality (RUCI) in India using state-wise annual data from 1999-2000 to 2011-2012.

Design/methodology/approach

A panel data analysis for a sample of 15 major Indian states using the generalized method of moments estimators provides an empirical evidence for the direct (microcredit), medium-direct (bank credit), and indirect (economic growth) effect of FSD on RUCI.

Findings

FSD is pro-urban in India resulting in a declining rural-urban consumption ratio (RUCR) and increasing RUCI. The negative effect of FSD on RUCR is greatest through the medium-direct channel followed by the indirect and direct channels.

Research limitations/implications

The study questions the social banking initiatives of the government in rural areas where more than 80 percent of the poor reside. There is a need for restructuring financial inclusion programs with a shift in their focus on rural areas and an improved mechanism to target the poor.

Originality/value

The paper proposes that formal financial services by banks are primarily availed by non-poor and urban population and hence acts as a medium-direct channel whereas the semi-formal financial services by microfinance institutions specifically target the rural poor and act as a direct channel to affect the poor. It is the first ever study to use state-wise data on microcredit disbursed under Self-help Group Bank Linkage Program to assess the direct impact of FSD on RUCI.

Details

International Journal of Social Economics, vol. 44 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 18 December 2019

Kashif Munir and Mahnoor Bukhari

The purpose of this paper is to examine the impact of three modes of globalization, i.e. trade globalization, financial globalization and technological globalization, separately…

2506

Abstract

Purpose

The purpose of this paper is to examine the impact of three modes of globalization, i.e. trade globalization, financial globalization and technological globalization, separately on income inequality on the Asian emerging economies.

Design/methodology/approach

The study uses Hecksher–Ohlin and the Stolper–Samuelson theorem as a theoretical model for the relationship between globalization and income inequality. The study uses pooled least square (POLS) and instrumental variable least square (IVLS) estimation technique but prefers the IVLS over POLS due to the problems of omitted variable biased and endogeneity. Due to unavailability of data for all the Asian emerging economies, the study uses the following 11 countries, i.e. Bangladesh, China, India, Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Singapore, South Korea and Thailand, from 1980 to 2014 for the trade and technological globalization model and from 1990 to 2014 for the financial globalization model.

Findings

Trade globalization significantly contributes to reduce income inequality in the Asian emerging economies. The impact of financial globalization on income inequality suggests that financial integration causes an increase in income inequality. Therefore, the benefits of financial globalization are not evenly distributed among the rich and the poor. The impact of technological globalization significantly contributes in the reduction of income inequality.

Practical implications

Government has to invest in research and development activities, establish efficient financial system, reduce trade restrictions and provide subsidies that help to increase the volume of trade.

Originality/value

This study contributes in the existing literature by analyzing the impact of trade globalization, financial globalization and technological globalization on income inequality in Asian emerging economies. The study provides useful guidelines to policy makers and governments to make effective policies in relation to globalization and income inequality that lead toward economic growth and reducing income inequality.

Details

International Journal of Sociology and Social Policy, vol. 40 no. 1/2
Type: Research Article
ISSN: 0144-333X

Keywords

Article
Publication date: 27 September 2011

Jialu Liu

Many countries have experienced, or are experiencing, urbanization. One such example is China. Even though the large‐scale rural‐urban migration seems chaotic on the surface…

1639

Abstract

Purpose

Many countries have experienced, or are experiencing, urbanization. One such example is China. Even though the large‐scale rural‐urban migration seems chaotic on the surface, there are certain underlying forces driving individual decisions. The purpose of this paper is to provide some understanding of the relationship between human capital, migration, and occupational choices.

Design/methodology/approach

The paper starts with an overlapping generations model. Human capital plays various roles across different occupations – it does not affect the income of farmers, it affects income of workers linearly, and it has increasing returns in rural non‐farm business. The paper then derives income profiles for individuals with heterogeneous human capital, and finds the human capital thresholds of occupations. The paper calibrates the model to China, and simulates the model to answer two questions: how does an improving human capital distribution affect rural wages, quantities of migrants and return migrants? How does a fast‐growing urban wage rate affect rural wages, quantities of migrants and return migrants?

Findings

First, depending on the initial human capital level, policies aiming to enhance human capital may have different impacts on migration. If the initial human capital level is low, these policies will yield more permanent migrants; on the contrary, if the initial human capital is at a relatively high level, then a shrinking permanent migrant class with a growing entrepreneur class can be expected. This results in an inverted U‐shaped relation between the initial human capital level and the size of the permanent migrant class. Second, even though the non‐farm business of return migrants helps raise rural wages, the income inequality between rural and urban areas is not eliminated and migration is persistent. Third, borrowing constraints limit the size of rural non‐farm businesses and slow down the development of rural industry. The fourth and final point is that, migration costs discourage labor mobility and reduce the quantities of both permanent migrants and entrepreneurs.

Originality/value

This is an original paper on this subject.

Details

Indian Growth and Development Review, vol. 4 no. 2
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 25 February 2022

Sudeshna Ghosh

The purpose of this study is to examine how renewable energy consumption moderates the relationship between inequality and carbon dioxide (CO2) emissions for Brazil, Russia…

Abstract

Purpose

The purpose of this study is to examine how renewable energy consumption moderates the relationship between inequality and carbon dioxide (CO2) emissions for Brazil, Russia, India, China and South Africa (BRICS). The nexus between energy use and geopolitical tensions has also been explored.

Design/methodology/approach

This study has used distinctive data sets from 1990 to 2018 to explore the interconnections on emission, energy use, inequality and geopolitics. To do away with the difficulties related to heterogeneity and cross-sectional dependence (CD), this paper uses recent estimation methods that are robust to panel heterogeneity and CD.

Findings

The results of the panel augmented mean group (AMG) estimation and common correlated effects mean group (CCEMG) estimation verify the environmental Kuznets curve. The findings show that a 1% rise in Gini inequality leads to a 0.24% rise in the CO2 emission (AMG) method and a 0.17% rise in emissions CCEMG (method). As far as the moderating impact of renewable energy upon Gini measure of inequality is concerned, it is −0.10 AMG and CCEMG methods of estimation, respectively. However, the moderating impact of renewable energy on the geopolitical index leads to a mitigating impact on CO2 emissions, 0.55% decline in AMG method.

Originality/value

This research makes a distinctive contribution by investigating for the first time to the best of the authors’ knowledge the main pillars of sustainable ecological development in the context of the BRICS nations.

Details

International Journal of Energy Sector Management, vol. 16 no. 6
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 9 March 2012

Rukmani Gounder and Zhongwei Xing

Measures of inequality determine the effectiveness of social and economic policies aimed at reducing inequality and to design effective intervention policies. The purpose of this…

1305

Abstract

Purpose

Measures of inequality determine the effectiveness of social and economic policies aimed at reducing inequality and to design effective intervention policies. The purpose of this paper is to focus on poverty reduction and welfare improving impacts of reducing income inequality in the case of Fiji. Using Fiji's Household Income and Expenditure Survey 2002‐2003, a comprehensive analysis is used to measure the level of inequality by household income, quintile income distribution, decomposition of inequality by ethnicity and regional groups, and the household income inequality by source of income.

Design/methodology/approach

Several statistical techniques have been applied to investigate the degree of inequality in the household income. These include the Gini coefficient, the Nelson ratio, the concentration index and the Atkinson index. An evaluation by ethnicity, regions and household income sources reflects the level of inequality, and concerns for policies and governance.

Findings

The results show that urban households, in particular, experience greater inequalities, in both positive and normative terms. The Indo‐Fijian households experience greater income inequalities than the Fijian households. Decomposition results for the separate factor income components also indicate major sources of inequality. These findings clearly establish that Fiji still has a long way to go in reducing the income gaps between the rich and the poor in both rural and urban households.

Originality/value

The paper is a first study that estimates various measures of inequality in the case of Fiji. The implication of the empirical findings suggests that Fiji is unlikely to achieve its Millennium Development Goal of halving poverty rate by 2015 due to the large income differentials by ethnicity and in the urban‐rural areas.

Details

International Journal of Social Economics, vol. 39 no. 4
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 9 October 2023

Aadil Amin, Asif Tariq and Masroor Ahmad

The principal aim of this study is to examine the relationship between financial development and income inequality in India using the financial Kuznets curve (FKC) hypothesis.

Abstract

Purpose

The principal aim of this study is to examine the relationship between financial development and income inequality in India using the financial Kuznets curve (FKC) hypothesis.

Design/methodology/approach

This study uses the autoregressive distributed lag (ARDL) model and the Toda–-Yamamoto causality test to investigate the long-run and short-run relationship and causality between financial development and income inequality. In addition, this study employs a principal component analysis (PCA) to construct a comprehensive financial development index.

Findings

The study found a long-run relationship between financial development and income inequality in India for the period under consideration. Trade is found to improve the income distribution, while inflation worsens income distribution. Moreover, the empirical results revealed a feedback causality between financial development and income inequality. The study results confirm an inverted U-shaped relationship between financial sector development indicators and income inequality, thus validating the FKC hypothesis for the Indian economy.

Research limitations/implications

The study draws attention of the government and policymakers, urging them to focus on building a strong financial sector by improving its efficiency. This, in turn, will lead to enhanced financial stability and a reduction in income inequality. They should prioritise the development of high-quality and sustainable financial products and services to ensure the robust growth of the financial sector.

Originality/value

To the best of our knowledge, this study is the latest of its kind to empirically test the financial development on income inequality and the FKC hypothesis simultaneously for the Indian economy using financial proxy variables from financial institutions (FIs) and financial markets (FMs) for the measurement of financial depth.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

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