The impact of finacial inclusion on income inequality in Asean plus six 2004-2017

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The impact of finacial inclusion on income inequality in Asean plus six 2004-2017

By Tran Bui Thi Hong Hanh (VNP 25)

Supervisor: Dr. Nguyen Trong Hoai

Abstract:

This thesis aims to study the relationship between financial inclusion and income inequality in ASEAN Plus Six. Using data from Global Findex Database of World Bank in period 2004-2017, OLS finds out that financial inclusion can reduce income inequality. However, when concerning the characteristic of countries, FE regression points out the positive relation between number of bank branches per 100,000 adults and income inequality is stronger than negative relation between number of ATMs pe 100,000 adults and income inequality. While using GMM to avoid endogenous problem, result shows that financial inclusion has weak impact on income inequality.

This thesis finds out that the relationship between inclusive financial system and income distribution is different between developing countries and developed countries. In developing countries, raise of financial inclusion can increase income inequality. While in developed countries, financial inclusion development can reduce income inequality ‘’

This paper provides some evidences to show that in developing countries, improving in number of bank braches raises income share of highest income group, and reduces income share of lowest income group. And level of financial inclusion of developing countries is quite lower than developed countries. 

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Tran Bui Thi Hong Hanh_VNP25_2020.pdf

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