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Inequality, Trade Openness And Economic Growth In Asia

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  • Muhammad Tariq MAJEED

Abstract

Using a panel data set for 18 Asian countries over the period 1970-2007, this study explores the relationship between economic growth and income inequality with special focus on the role of credit market imperfections in shaping the linkage. The study identifies credit market imperfections in developing countries as the likely reason for a positive relation between inequality and economic growth. Countries in the region with high financial intermediation tend to grow more as compare to low financial intermediation. Moreover, this paper finds evidence that more physical and human capital investment have statistically significant and positive effect on economic growth. Finally, openness to trade has been confirmed positive and significant in this region, thereby implying outward looking economies grow more.

Suggested Citation

  • Muhammad Tariq MAJEED, 2010. "Inequality, Trade Openness And Economic Growth In Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(2).
    • Handle: RePEc:eaa:aeinde:v:10:y:2010:i:2_16
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    Cited by:

    1. Ademola Obafemi Young, 2019. "Growth Impacts of Income Inequality: Empirical Evidence From Nigeria," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 226-262, December.
    2. Muhammad Tariq MAJEED, 2010. "Inequality, Trade Openness And Economic Growth In Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(2).
    3. Majeed, Dr. Muhammad Tariq, 2013. "Inequality, Trade and Development: Evidence from Developing Countries," MPRA Paper 50337, University Library of Munich, Germany.
    4. Ahmed Mohamed Ezzat, 2018. "Trade Openness: An Effective tool for Poverty Alleviation or an Instrument for Increasing Poverty Severity?," Working Papers 1248, Economic Research Forum, revised 07 Nov 2018.
    5. Muhammad AFZAl, 2012. "Do Structural Transformation And Trade Liberalisation Cause Economic Growth In Pakistan?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(1).
    6. Seven, Unal & Coskun, Yener, 2016. "Does financial development reduce income inequality and poverty? Evidence from emerging countries," Emerging Markets Review, Elsevier, vol. 26(C), pages 34-63.
    7. G. C. Lim & Paul D. McNelis, 2014. "Income Inequality, Trade and Financial Openness," Melbourne Institute Working Paper Series wp2014n07, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    8. Majeed, Dr. Muhammad Tariq, 2013. "Inequality, Financial Development and Government: Evidence from Low-Income Developing Countries," MPRA Paper 50296, University Library of Munich, Germany.
    9. Kemal ERKİŞİ & Turgay CEYHAN, 2020. "The Relationship Between Economic Growth and Income Inequality: A Panel Data Analysis," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(43).

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    More about this item

    Keywords

    economic growth; inequality; credit market imperfection; panel data;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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