Does institutional quality matter in financial development and income inequality nexus? new evidence from Sub-Saharan Africa

Valentine Soumtang Bime () and Itchoko Motande Mondjeli Mwa Ndjokou ()
Additional contact information
Valentine Soumtang Bime: University of Yaounde II
Itchoko Motande Mondjeli Mwa Ndjokou: University of Maroua

Economics Bulletin, 2023, vol. 43, issue 3, 1395 - 1410

Abstract: The objective of this paper is to evaluate the effect of institutional quality on the financial development- income inequality nexus in Sub-Saharan Africa (SSA). To this end, we estimate a dynamic panel model using data from thirty-three (33) SSA countries between 1990 and 2018 through the generalized method of moments in system. To capture financial development, we use its fourth dimensions namely depth, efficiency, access and stability, and we construct a composite index using principal component analysis. We also use set of institutional quality indicators. The results show that the poor quality of institutions in SSA countries worsens the effect of financial development on income inequality overall. However, this effect is mitigated for financial efficiency. These results are consistent with the robustness tests. These results call for the implementation of programs to strengthen institutional quality in SSA countries.

Keywords: Financial development; income inequality; institutional quality; Sub-Saharan Africa. (search for similar items in EconPapers)
JEL-codes: D3 G2 (search for similar items in EconPapers)
Date: 2023-09-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I3-P119.pdf (application/pdf)

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:ebl:ecbull:eb-22-00717

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().