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Control of corruption, microfinance, and income inequality in MENA countries: evidence from panel data

Mongi Lassoued ()
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Mongi Lassoued: University of Sousse

SN Business & Economics, 2021, vol. 1, issue 7, 1-19

Abstract: Abstract There has been a reduction in income inequality in the MENA region along with a dramatic deterioration in control corruption. In this regard, microfinance appears to be a potential factor that could contribute to reducing these inequalities in such region. This paper contributes to the literature in an attempt to understand the key role of microfinance and control of corruption in reducing income inequality in MENA countries using a panel data covering the period 1996–2018. To examine the relationships, the paper applies several estimation techniques, which are the generalized least squares (GLS) method, fixed effects model (FE) and the system-generalized method of moments (GMM). Our empirical results indicate that higher level of microcredit and lower level of corruption associate with lesser income inequality, and therefore, reduce the income gap between the poor and the rich. Results also show that the development of microfinance in MENA countries is the solution to facilitate the access of vulnerable groups to microcredit.

Keywords: Corruption; Microfinance; Income inequality; Panel data; MENA region (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s43546-021-00099-w

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