Equity market liberalization, credit constraints and income inequality

Artikel

This paper provides compelling evidence that equity market liberalization, as the most efficient way to smooth financial market frictions such as credit constraints, can alleviate persistent cross-dynastic income inequality by promoting increased human capital accumulation. The authors examine the effect of equity market liberalization on inequality by using data from 72 countries for 1980-2006. Their measured effect is robust to alternative measures of equity market liberalization. Finally, the authors show that foreign equity flows benefit initially less-active stock markets more than the active ones, providing evidence that foreign equity flows act as a substitute for domestic financial markets. This finding emphasizes the possibility of reducing inequality and poverty through equity market liberalization.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 7 ; Year: 2013 ; Issue: 2013-12 ; Pages: 1-28 ; Kiel: Kiel Institute for the World Economy (IfW)

Classification and Topics

• Classification: Wirtschaft ; Open Economy Macroeconomics ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; Economic Development: Human Resources; Human Development; Income Distribution; Migration ; Macroeconomic Analyses of Economic Development ; Financial Aspects of Economic Integration
• Subject: income inequality ; equity market liberalization ; human capital ; economic growth ; Aktienmarkt ; Deregulierung ; Kapitalmarktregulierung ; Wirkungsanalyse ; Einkommensverteilung ; Bildungsinvestition ; Armut ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sun, Puyang ; Sen, Somnath ; Jin, Shujing
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2013

Further information

• DOI: doi:10.5018/economics-ejournal.ja.2013-12
• Handle: http://hdl.handle.net/10419/71409
• Last update: 10.03.2025, 11:43 AM CET