Impact of Financialization and Financial Development on Inequality:  Panel Cointegration Results Using OECD Data

Shin, Hochul; Lee, Keun

doi:10.1162/asep_a_00659

Cited by 11 publications

(8 citation statements)

References 42 publications

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“…If these challenges become permanent features of South Korea, 24 A firm-level analysis by Kim and Cho (2008) confirms this negative linkage from more foreign share to less investment. Shin and Lee (2019) confirm the positive linkages from more dividends payment to more inequality measured by the income share of the top 10% richest.…”

Section: The Korean Experience: From Short To Long Cyclessupporting

confidence: 57%

Innovation–Development Detours for Latecomers

Lee

2024

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Many developing countries still face difficulties initiating and sustaining economic development. Such difficulties have been exacerbated by the COVID-19 pandemic, resulting in an increasing divergence between rich and poor countries. One crucial question is whether to follow the trajectories of present-day rich countries or seek out different, new trajectories. Although this is a fundamental question, scholars offering mainstream prescriptions have not sufficiently explored it. Drawing on extensive empirical studies of firms and industries, Innovation and Development Detours for Latecomers proposes an effective alternative to prevailing development thinking. It presents a rich menu of development pathways, including a new role for Schumpeterian states whereby they do not follow the paths of technological development already taken by advanced countries. Rather, they can skip certain stages and even create their own detours thereby leapfrogging advanced countries in both manufacturing and service sectors. This title is also available as Open Access on Cambridge Core.

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Section: The Korean Experience: From Short To Long Cyclessupporting

confidence: 57%

Innovation–Development Detours for Latecomers

Lee

2024

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“…The latter analysed the subject from two different scopes based on their research contexts. By employing panel data on the countries the effect of financial development on income inequality was examined by scholars such as Clarke et al (2006), Shabaz and Islam (2011), Jauch and Watzka (2015), De Haan and Sturm (2017), Younsi and Bechtini (2018), Shin and Lee (2019). On the other hand, Shahbaz et.…”

Section: Related Workmentioning

confidence: 99%

The Role of Financial Development in the Relationship Between Income Inequality and Economic Growth: Evidence from Method of Moments Quantile Regression

Van

2021

İzmir İktisat Dergisi

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This study sheds light on the linear and nonlinear relationship between financial development level and income inequality across 79 countries within a period of 1995 to 2016. To test this relationship panel the Method of Moments Quantile Regression (MMQR), which was recently published by Machado and Silva (2019), has been employed. Besides Pedroni and GUV cointegration tests, FMOLS and DOLS have been administered. Although traditional mean estimators can explain the heterogonous nature of analysed countries, since their results depend on conditional mean they fall short in making the responses heterogonous. In that sense, the effects of specific factors such as financial and economic developments which also impact income inequality have been inspected via MMQR, which also takes into account certain econometric difficulties such as heterogeneity and endogeneity in various quantiles. Compared to other methods, another advantage of MMQR is that by providing information on how explanatory variables can influence the entire conditional distribution, it allows the use of methods only valid in the estimation of conditional means, such as difficulty in noticing heterogeneity and endogeneity problems in panel data models. According to the results obtained from the MMQR model, Greenwood and Jovanovic's (1990) inverted U hypothesis was accepted only in countries with an inequality income distribution between financial development and income inequality, whereas in counties with equal income distribution the income inequality widening hypothesis was confirmed. According to Panel FMOLS and Panel DOLS and also coefficient estimations, Greenwood and Jovanovic (1990)'s inverted U hypothesis was confirmed in the relationship between financial development and income.

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“…The aforementioned symptom associated with financialization is also one of the sources of the increasing income inequality, apart from the impacts of the skill-biased technological change including automation. H. Shin and K. Lee (2019) showed that the increased shares of stockholders in profits or financial resources of nonfinancial sectors led to the rising inequality measured by the income share of the top 10% rich in OECD countries, which includes Korea (Fig. 3).…”

Section: Corporate Governance Ownership and Financializationmentioning

confidence: 99%

From Catch-up to Convergence? Re-casting the Trajectory of Capitalism in South Korea

Lee¹,

Shin²,

Lee³

2020

Korean Studies

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This paper raises a fundamental question with regard to the trajectory of capitalism in Korea, whether Korea is still "fast-following" developed countries and on-track to converge with their economic systems, or continues to forge a unique development path different from that of the mature capitalist economies. In an explorative effort to answer this question, this paper compares the key outcome variables of the Korean economy with those of other economies by taking the variety of capitalism (VoC) perspective. Existing evidence may point to the possibility of Korean capitalism converging with a U.S.-and U.K.-style liberal market economy (the so-called "Anglo-Saxon" economy) in terms of slow-down of growth, rising unemployment, and higher income inequality, despite the differences in several underlying institutions, such as the national innovation systems and corporate governance and ownership. The driving forces for convergence seem to be the ongoing trend of financialization and the rise of shareholder capitalism, which is perceived to be the cause of low investment and high inequality. This paper is one of the first calls to consider a switch from the existing "catch-up and post catch-up" framework to the new "catch-up and convergence" framework when assessing the past, present, and future capitalism in South Korea.

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Impact of Financialization and Financial Development on Inequality: Panel Cointegration Results Using OECD Data

Cited by 11 publications

References 42 publications

Innovation–Development Detours for Latecomers

Innovation–Development Detours for Latecomers

The Role of Financial Development in the Relationship Between Income Inequality and Economic Growth: Evidence from Method of Moments Quantile Regression

From Catch-up to Convergence? Re-casting the Trajectory of Capitalism in South Korea

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