Financial Development, Technological Innovation and Income Inequality: Time Series Evidence from Turkey

Murat Cetin (), Harun Demir () and Selin Saygin ()
Additional contact information
Murat Cetin: Tekirdag Namik Kemal University
Harun Demir: Tekirdag Namik Kemal University
Selin Saygin: Tekirdag Namik Kemal University

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2021, vol. 156, issue 1, No 3, 47-69

Abstract: Abstract The main aim of the study is to analyze the link between technological innovation and income inequality for Turkey in terms of financial Kuznets curve (FKC) hypothesis. The study uses time-series data from 1987 to 2018. We employ the Hatemi-J cointegration, ARDL bounds test and VECM Granger causality techniques to investigate the relations between the variables. We also employ the DOLS, FMOLS and CCR approaches to estimate the long-run parameters. The results reveal that the series are cointegrated under the structural breaks. The results also reveal that the FKC is valid for Turkish economy in the long run. Technological innovation positively affects income inequality while economic growth is negatively linked with income inequality. There exists a bi-directional causal linkage between financial development and income inequality. Technological innovation and income inequality cause each other. In addition, economic growth causes income inequality. Empirical results suggest a twofold policy implication: i) improvement of the financial system and ii) to eliminate the adverse effects of technological innovations on income distribution.

Keywords: FKC; Income inequality; Financial development; Technological innovation; Cointegration; Causality (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://link.springer.com/10.1007/s11205-021-02641-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:soinre:v:156:y:2021:i:1:d:10.1007_s11205-021-02641-7

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11135

DOI: 10.1007/s11205-021-02641-7

Access Statistics for this article

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement is currently edited by Filomena Maggino

More articles in Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().