Income inequality, financial flows and political institution

sub-Saharan African financial network

John Nkwoma Inekwe*, Yi Jin, Maria Rebecca Valenzuela

*Corresponding author for this work

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Using firm-level loan contracts, we generate aggregate measures of financial connections and examine how these indices relate to income inequality in sub-Saharan African (SSA) countries. The results reveal that more connectedness is not beneficial for these economies as shown by the degree and the eigenvector indices. Betweenness centrality worsens income inequality such that the act of intermediation in the provision of financing remains detrimental to net and market income inequalities. Independent access to funding has no significant effect on income inequality. While accounting for the influence of political instability, the results reveal that financial connectedness is beneficial in reducing income inequality.
Original languageEnglish
Pages (from-to)2635-2665
Number of pages31
JournalEmpirical Economics
Volume58
Issue number6
Early online date7 Feb 2019
DOIs
Publication statusPublished - 1 Jun 2020

Keywords

  • SSA economy
  • Financial networks
  • Institutions
  • Income inequality

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