Article thumbnail

Nonlinear Dynamics in the Finance-Inequality Nexus in China-CHNS Data

By Mohammad Masudur Rahman, Guan Fuquan and Laila Arjuman Ara

Abstract

This paper empirically investigates the effects of financial development on incomes of Chinese residents particularly within various income groups using data from six provinces by applying the Quantile Regression model. The Greenwood and Jovanovich hypothesis that illustrates the inverted U shaped relationship between financial development and income inequality is tested. This empirical study demonstrates that financial development has a positive but non-linear effect on the annual income of individuals from various income groups at different quantiles. The effect is an inverted U or Kuznets effect indicating an increase at first and then a drop. As for the distribution of the impact on various income groups, the low-income group is under the most dominant influence followed by the high-income group with the middle-income groups receiving relatively smaller influence. Findings indicate that promoting balanced financial development would help to ease the income gap between Chinese residents

Topics: financial development, income inequality, China, quantile regression, Environmental effects of industries and plants, TD194-195, Renewable energy sources, TJ807-830, Environmental sciences, GE1-350
Publisher: MDPI AG
Year: 2019
DOI identifier: 10.3390/su11010191
OAI identifier: oai:doaj.org/article:b0f7a612480c48d98e14308290dc8446
Journal:
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://www.mdpi.com/2071-1050/... (external link)
  • https://doaj.org/toc/2071-1050 (external link)
  • https://doaj.org/article/b0f7a... (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.