What drives financial development? A Meta-regression analysis

Doucouliagos, Hristos; Haan, Jakob de; Sturm, Jan‐Egbert

doi:10.1093/oep/gpab044

Cited by 4 publications

(1 citation statement)

References 97 publications

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“…Posterior inclusion probabilities (PIPs) are also computed for each variable, indicating the probability that it belongs in the ‘true’ structural model. BMA is a common method for examining heterogeneity in economic meta‐studies (Doucouliagos et al., 2022; Zigraiova et al., 2021). Due to the limited number of short‐run estimates, we conduct this analysis for the long‐run estimates only.…”

Section: Meta‐regression Analysismentioning

confidence: 99%

Remittances and inequality: A meta‐analytic investigation

Anwar,

Mang,

Plaza

2024

World Economy

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This article provides a comprehensive meta‐analysis that addresses an important gap in the literature by examining the relationship between remittances and inequality in recipient countries. While numerous empirical studies have explored this relationship, there has been no prior attempt to systematically and rigorously synthesise the evidence. This study employs advanced meta‐analysis techniques, such as Bayesian model averaging, to analyse 578 estimates reported in 45 studies. The overall finding is that the effect of remittances on inequality is negative but economically small. However, significant regional variations exist, with remittances contributing to increased inequality in South Asia, while having a substantial inequality‐reducing effect in East Asia, Eastern Europe and Latin America. In the Middle East and North Africa and Sub‐Saharan Africa, only marginal economic impact is found. We recommend that future studies should control for educational attainment, income level and institutional quality to improve the accuracy of their estimates.

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Section: Meta‐regression Analysismentioning

confidence: 99%

Remittances and inequality: A meta‐analytic investigation

Anwar,

Mang,

Plaza

2024

World Economy

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Does Financial Development Reduce the Poverty Gap?

2021

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Financial development may affect poverty directly and indirectly through its impact on income inequality, economic growth, and financial instability. Previous studies do not consider all these channels simultaneously. To proxy financial development, we use the ratio of private credit to GDP or an IMF composite measure. Our preferred measure for poverty is the poverty gap, i.e. the shortfall from the poverty line. Our fixed effects estimation results for an unbalanced panel of 84 countries over the 1975–2014 period suggest that financial development does not have a direct effect on the poverty gap. However, as financial development leads to greater inequality, which, in turn, results in more poverty, financial development has an indirect effect on poverty through this transmission channel. Only if we use poverty lines of $3.20 or $5.50 (instead of $1.90 a day as in our baseline model) to define the poverty gap, we find that economic growth reduces poverty. This implies that in those cases the overall effect of financial development on poverty may be positive or negative, depending on which indirect effect, i.e. that of income inequality or growth, is stronger. Financial instability does not seem to affect the poverty gap. These results are consistent across various robustness checks.

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Trust in financial institutions: A survey

Cruijsen

Haan

Roerink

2021

Journal of Economic Surveys

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Trust in financial institutions is widely considered important. However, a clear overview of studies on the drivers of trust is missing. We intend to fill this gap in the literature. After discussing why trust in financial institutions is important, we turn to its measurement, where we distinguish between trust in one's own institution and trust in institutions in general (narrow-scope and broad-scope trust), and discuss how these measures differ from generalized trust (i.e. trust in other people with whom there is no direct relationship). Finally, we survey the determinants of trust in financial institutions and discuss a wide range of drivers. First, trust in financial institutions depends on the economic situation: it behaves procyclically and is negatively affected by financial crises. Second, the behavior of the financial institutions matters: prudent conduct, the provision of good services and financial health have a positive effect on trust. Third, although consumer characteristics also relate to trust, many of these relationships are context-dependent.Fourth, there is a positive association between narrow-scope trust on the one hand and broadscope trust and generalized trust on the other. Last, policy measures and supervisory actions can help prevent loss of trust.

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What drives financial development? A Meta-regression analysis

Cited by 4 publications

References 97 publications

Remittances and inequality: A meta‐analytic investigation

Remittances and inequality: A meta‐analytic investigation

Does Financial Development Reduce the Poverty Gap?

Trust in financial institutions: A survey

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