Income inequality and economic growth among emerging african economies: the moderating role of financial inclusion
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Date
2021
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KNUST
Abstract
The main objective of the study is to examine the moderating role of financial inclusion in the relationship between income inequality and economic growth among emerging African economies. In order to achieve the above objective, the study uses a sample of all ten emerging African countries. The study further uses the purposive sampling technique which is intended to give the researcher access to the countries that are specifically needed for this research. The data for the study covers the duration from 2004 to 2017. This research follows a panel data approach and based on this, the data is analysed using the random effect regression analysis. Based on the findings of the study, it is concluded that income inequality has no significant effect on economic growth of emerging African economies, in addition, financial inclusion reduces the economic growth rate of these emerging economies. However, financial inclusion moderates the relationship between income inequality and economic growth and changes the negative effect to a positive one. The study recommends that policy makers of emerging African economies should design programs to increase financial inclusion for those who are currently excluded from accessing financial resources. If policy makers can improve financial accessibility in these countries by even a modest amount, it is possible to reduce income inequality and thus reverse the negative relationship between income inequality and economic growth. The study further recommends that governments of emerging African countries should adopt a progressive tax system designed in such a way that the rich pay a higher percent in income taxes than the poor in order to reduce the income inequality levels of these countries. This would help in income retribution which can further promote economic growth among these countries
Description
A thesis submitted to the department of accounting and finance college of humanities and social sciences in partial fulfilment of the requirements for the degree of mba finance