Financial development and poverty reduction in emerging market economies

Abstract

Poverty reduction is one of the key challenges in the globalized world. This study investigates the relationship between financial development and poverty reduction in emerging market economies during the period 1993-2012. The Carrión-i-Silvestre, del Barrio-Castro, and López-Bazo (2005) panel unit root test and the Basher and Westerlund (2009) cointegration test was applied considering the cross-sectional dependence and multiple structural breaks in the study period. The findings indicated that financial development, including banking sector development and stock market development, had a significant positive impact on poverty reduction in emerging market economies.

A bibliometric analysis on poverty alleviation

“…Stream 3 analyses the impact of financial development on poverty elimination (Kalwij & Verschoor, 2007;Hameed et al, 2017;Bayar, 2017;Boukhatem, 2016;Kaidi et al, 2019), the role of education, microfinance, microcredit, aid, and donation to remove poverty (Page & Shimeles, 2015;Kaya et al, 2013;Mojumder & Lu, 2013;White, 1996;Jones, 2016;Cremin & Nakabugo, 2012;Brown & James, 2020;Medeiros et al, 2020).…”

“…Stream 3 analyses the impact of financial development on poverty elimination (Kalwij and Verschoor, 2007; Hameed et al , 2017; Bayar, 2017; Boukhatem, 2016; Kaidi et al , 2019), the role of education, microfinance, microcredit, aid and donation to remove poverty (Page and Shimeles, 2015; Kaya et al , 2013; Banerjee and Jackson, 2017; Mazumder and Lü, 2015; White, 1996; Jones, 2016; Cremin and Nakabugo, 2012; Brown and James, 2020; Medeiros et al , 2020 ) . Stream 4 describes the impact of income diversification, migration, foreign remittances and employability on eliminating poverty (Haggblade et al , 2010; Ellis and Freeman, 2004; Mbaye and Drabo, 2017; Fox and Sohnesen, 2016; Vanegas et al , 2015).…”

“…Stream 3 analyses the impact of financial development on poverty elimination (Kalwij and Verschoor, 2007; Jalilian and Kirkpatrick, 2002; Jeanneney and podar, 2011; Hameed et al , 2017; Bayar, 2017; Boukhatem, 2016; Abosedra et al , 2016; Jung et al , 2015; Uddin et al , 2014; Chyi and Hwang, 2011; Kwon and Yi, 2009; Jalilian and Kirkpatrick, 2005; Premchander, 2003; Yao, 2000; Kaidi et al , 2019), how poverty can be reduced through economic growth (Besley and Burgess, 2000; Bigsten et al , 2003; De Silva, 2016; Moore and Donaldson, 2016; Huang et al , 2016; Belke and Wernet, 2015; McKay, 1997, 2013; David and Marouani, 2012; Suryahadi et al , 2012; Goh et al , 2009; Fanta and Upadhyay, 2009; Klasen, 2008; Vetterlein, 2007; Balisacan et al , 2003), the role of aid and donation to remove poverty (Collier and Dollar, 2002; Mosley et al , 2004; Page and Shimeles, 2015; Kaya et al , 2013; Sobhan, 2005; Arvin and Barillas, 2002; White, 1996), the role of microfinance and microcredit to mitigate poverty ( Banerjee and Jackson, 2017; Mazumder and Lü, 2015; Imai et al , 2010; Barboza and Trejos, 2009; Shastri, 2009; Swain et al , 2008; Greeley, 2003; Khan et al , 2021; Félix and Belo, 2019) and, finally, the role of education in eradicating poverty for sustainable development (Jones, 2016; Cremin and Nakabugo, 2012; Gounder and Xing, 2012; Rolleston, 2011; Walker et al , 2009; Yamada and Castro, 2009; Larson and Murray, 2008; Brown and James, 2020; Medeiros et al , 2020 ) .…”

Hotspot analysis of rural inclusive finance based on keyword co-occurrence clustering

“…Sethy (2016) regard inclusive finance as one of the criteria for measuring economic growth and human well-being, and the development of inclusive finance helps to reduce and eliminate poverty and inequality of access; Achugamonu et al (2019) examined the dynamic relationship between digital finance and financial inclusion in 27 sub-Saharan African countries. Bayar (2017) considered poverty reduction to be one of the major challenges of a globalised world and examined the relationship between financial development and poverty reduction in emerging market economies between 1992 and 2012; Kaidi et al (2019) tested the relationship between financial development, institutional quality and poverty in 132 countries observed between 1980 and 2014 using a three-stage least square method (Hicham, 2017). A study of economic growth as a percentage of gross domestic product (GDP) per capita in 14 selected Arab countries (1996) was conducted to explore the dynamic causal relationship between poverty alleviation as measured by per capita consumption; Yorulmaz (2018) selected the two dimensions of financial supply and financial demand, this paper studies the dynamic changes of inclusive finance development in different countries, and constructs the relevant inclusive financial index (IFI) to measure the development of inclusive finance.…”

The Measurement of Green Finance Development Index and Its Poverty Reduction Effect: Dynamic Panel Analysis Based on Improved Entropy Method

“…is case has attracted great attention from the academic community. Many scholars show their concerns about the relationship between finance development and poverty [1][2][3][4][5], such as Jalilian (2002), Philip and Asena (2004), Jordan (2005), , and Yılmaz (2017). Financial constraints are proved to be the greatest difficulty in poverty elimination according to the antipoverty experiences from many developing countries.…”