Sustainable Utilization of Financial and Institutional Resources in Reducing Income Inequality and Poverty

Abstract

This study aims to determine the role of globalization, electronic government, financial development, concerning the moderation of institutional quality in reducing income inequality and poverty in One Belt One Road countries. The electronic government and regional integration of the economies of the One Belt One Road countries has increased globalization and can play a vital role in reducing income inequality and poverty. However, this globalization and digital transformation of government systems can only be beneficial in the presence of good institutional quality. The sample includes 64 One Belt One Road countries from 2003 to 2018. We employed a two-step system generalized method of moment (Sys-GMM) and a robustness check through Driscoll–Kraay standard errors regression. Our findings show that globalization, economic growth, e-government development, government expenditure, and inflation have a statistically significant and negative impact on income inequality and are key to eradicating income inequality and poverty. On the other hand, financial development, gross capital formation, and population size positively influence income inequality, which causes an increase in poverty and income inequality as financial development and population levels increase. Moderating variable institutional quality also positively impacts income inequality, which means that institutional quality in Belt and Road Countries is weak, as they are mostly developing countries that need to improve their systems. Moreover, the marginal effect also revealed that institutional quality has a corrective effect on the factors’ relationship with income inequality. Our findings endorse and conclude that globalization and e-government development improve economic growth and eradicate poverty and income inequality by boosting digitalization, investments, job creation, and wage increases for semi-skilled and unskilled human capital in Belt and Road countries. The sustainable utilization of financial and institutional resources plays a vital role in reducing income inequality and poverty in Belt and Road countries.

The impacts of economic globalization on agricultural value added in developing countries

“…Swisher et al [ 16 ] stated that EG is the antithesis of the critical concepts of sustainable agriculture, causing emphases on product supply from local farmers and reducing reliance on “nourishing”local ecosystems and economies. This is compounded by accusations that EG is the cause of increasing inequality and strongly supports the negative effect of agriculture on child labor [ 2 , 17 , 18 ].…”

Nexus of regional integration, socioeconomic determinants and sustainable development in belt and road initiative countries

“…The Hansen and Sargan test was applied to examine the instrument’s reliability and control the over-identifying restrictions in the analysis. Therefore Hansen test and Sargan tests to estimate the other restrictions were also validated [ 24 , 70 ]. The number of instruments (J-statistics) employed is 51, which indicates that the two-step system GMM is a valid instrument for this study.…”

“…Therefore, GMM provides more efficient and accurate estimates by controlling the lag-effect of its own dependent variable-SD to predict the future more accurately in the long term. Thus, previous studies of Arellano and Bond [ 71 ], Arellano and Bover [ 72 ], Blundell and Bond [ 73 ], Roodman [ 74 ], Farhadi, Islam [ 75 ], Arminen and Menegaki [ 76 ], Lin [ 77 ], Ahmad, Khattak [ 78 ], Abbas, Gillani [ 22 ], and Ullah, Kui [ 24 ] relied on and preferred this technique for the panel dataset. To deal with the potential endogeneity issues, the GMM estimator is best suited.…”

“…Sustainable development is a combination of economic, social, and environmental progress; under the premise, it is essential to incorporate and settle the economic, social, and environmental features within an all-inclusive and stable sustainable development framework. The beneficial influence of sustainability on social factors can be achieved only when the development is spread all over the population [ 24 ]. Social and governance factors and reporting of these factors were encouraged by regulators of different countries, including the Belt and Road Initiative countries.…”

The Dynamic Nexus Between Financial Development, Renewable Energy and Carbon Emission: Role of Globalization and Institutional Quality Across BRI Countries

“…Like past studies conducted by Adeleye & Eboagu (2019), Arminen (2018), Arminen and Menegaki (2019) and Ullah et al (2021). The structural equations of simultaneous equations model can be as follows:…”