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Effect of FinCredit on income inequality: the moderating role of financial inclusion

Author

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  • Xuan T. T. Pham

    (University of Economics and Law
    Vietnam National University)

  • Thu B. Luu

    (University of Economics and Law
    Vietnam National University)

Abstract

This paper examines the direct effect of FinCredit on income inequality and the moderating effect of Financial Inclusion. Using a dual-process variable selection approach, we develop an optimal model to test two hypotheses and explore how FinCredit influences direct and indirect income inequality. Our study has made a pioneering contribution to the literature by identifying the direct positive impact of FinCredit on income inequality, which previous research had not yet revealed. Additionally, we have discovered new evidence on the crucial role of Financial Inclusion in enhancing the positive effects of FinCredit on reducing income inequality. We provide reliable scientific empirical evidence that clarifies the confusion surrounding fintech credit and encourages its development. Practical managerial implications can be inferred from the moderating role of financial inclusion on the positive effect of fintech credit on income inequality. These results have significant policy implications for promoting FinCredit and Financial Inclusion to reduce income inequality in the era of digital transformation.

Suggested Citation

  • Xuan T. T. Pham & Thu B. Luu, 2024. "Effect of FinCredit on income inequality: the moderating role of financial inclusion," Review of Quantitative Finance and Accounting, Springer, vol. 62(3), pages 953-969, April.
    • Handle: RePEc:kap:rqfnac:v:62:y:2024:i:3:d:10.1007_s11156-023-01226-4
    DOI: 10.1007/s11156-023-01226-4
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    More about this item

    Keywords

    FinCredit; FinTech; Financial inclusion; Income inequality; Feature selection;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O - Economic Development, Innovation, Technological Change, and Growth
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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