 Financial structure, bank competition and income inequalityJoyce Hsieh, Ting-Cih Chen and Shu-Chin Lin The North American Journal of Economics and Finance, 2019, vol. 48, issue C, 450-466 Abstract: This paper empirically investigates the contribution of finance to income inequality with particular emphasis on the role of financial structure (i.e., stock market orientation) and banking market structure (bank market power), an aspect that has been overlooked in the literature. It employs recently developed cointegration techniques that take into account cross-section correlation and simultaneity in non-stationary panels. The paper finds that income inequality increases with financial deepening but decreases with a more market-oriented financial system. It is also found that greater concentration, less competition in the banking sector strengthens income inequality. These effects are found stronger during the banking crisis period, for high-income countries or countries with better quality of political institutions. The data thus suggest that financial reform toward promoting stock market development, enhancing competition or lessening concentration in the banking sector is beneficial to income distribution. Keywords: Income inequality; Financial development; Financial structure; Concentration; Competition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:48:y:2019:i:c:p:450-466 DOI: 10.1016/j.najef.2019.03.006 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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