Inequality and credit growth in Russian regions

Makram El-Shagi, Jarko Fidrmuc and Steven Yamarik
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Steven Yamarik: California State University Long Beach, CA

No 2019/6, CFDS Discussion Paper Series from Center for Financial Development and Stability at Henan University, Kaifeng, Henan, China

Abstract: We test the Rajan hypothesis using data for 75 highly heterogeneous Russian regions between the Russian crisis and the introduction of international sanctions (2000-2012). Applying static as well as dynamic panel data models, we show that a rise in income inequality measured by regional Gini indices is significantly correlated with the growth of personal loans. Thus, the rising inequality in Russia is likely to have implications on financial staiblity and occurrence of banking crises. Moreover, the correlation of inequality and corporate loans indicates that inequality affects loans growth across more channels than those implied by the Rajan hypothesis.

Keywords: Income inequality; bank loans; Rajan hypothesis; Russia (search for similar items in EconPapers)
JEL-codes: E51 G01 R11 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2019-06
New Economics Papers: this item is included in nep-ban, nep-cis, nep-mac and nep-tra
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http://cfds.henuecon.education/images/dpaper/WP_6_2019_Russian_Regions.pdf First version, 2019 (application/pdf)

Related works:
Journal Article: Inequality and credit growth in Russian regions (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fds:dpaper:201906

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