Does financial liberalization reduce income inequality? Evidence from Africa

Yawovi M.A. Koudalo and Ji Wu

Emerging Markets Review, 2022, vol. 53, issue C

Abstract: This paper investigates the impact of financial liberalization on income inequality by using the country-level panel data from 51 African countries in more than two decades. We find that income inequality increases, rather than decreases, with the level of financial liberalization. This finding is consistent with the hypothesis that financial liberalization likely induces banks to allocate the scarce financial resources in African countries more discriminatively to rich clienteles but excludes the poor ones from financial access, which thus widens the income gap.

Keywords: Financial liberalization; Income inequality; Africa (search for similar items in EconPapers)
JEL-codes: D31 F36 O15 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:53:y:2022:i:c:s1566014122000620

DOI: 10.1016/j.ememar.2022.100945

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