IMPACT OF FINANCING TO THE INCOME INEQUALITY IN ASEAN: DATA PANEL ANALYSIS
Keywords:
Financialization, inequality, fixed effect model, generalized method moment
Abstract
This paper examines the impact of financialization on income inequality in ASEAN-5 countries for the period of 1990-2013 by employing panel data analysis. The data was collected from various secondary sources by undertaking fixed effect model and generalized method moment. The result shows that there is a significant relationship between all financialization indicators and income distribution. Generalized method moment analysis using Arellano-Bond estimator also shows that all financialization indicators have a significant relationship with income distribution. There is no different sign estimator both in fixed model effect and generalized method moment analysis. This paper revealed that financialization indicators such as stock market capitalization and return on assets contribute positively to worsen income inequlality. In
contrast, domestic private debt securities have a negative effect on gini coefficient in ASEAN-5 countries indicating that increasing domestic private debt securities will improve income distribution in the region.
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References
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William H. Greene. (2003). Econometric Analysis. Prentice Hall. New Jersey.
Afsar, Muharrem, Afsar, Asli, dan Mecik, Oytun. (2014). Financialization Process and Outcomes in Developed Countries, International Journal of Economics and Finance. 6(12), 192-200.
Arellano, Manuel dan Bond, Stephen. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equation. The Review of Economic Studies, April 1991. 58 (2), 277-297.
Badan Pusat Statistik. (2015). diakses Desember 2015, http://www.bps.go.id/Subjek/view/id/23#subjekViewTab3|accordion-daftar-subjek1
Badi H. Baltagi. (2005). Econometric Analysis of Panel Data. John Wiley &Sons Ltd, West Sussex.
Barro, Robert J. (2008). Inequality and Growth Revisited. Asian Development Bank (ADB), Working Paper Series on Regional Economic Integration No. 11, January 2008.
Beck, Thorsten dan Levine, Ross. (2004). National Bureau of Economic Research (NBER). Working Paper No. 10979. December 2004.
Benhabib, Jess. (2003). The Tradeoff Between Inequality and Growth, Annals of Economics and Finance. Vol.4, 329-345.
Berg, Andrew,dan Ostry, Jonanthan D. (2011). Inequality and Unsustainable Growth: Two Sides of the Same Coin?. International Monetary Fund (IMF), IMF Staff Discussion Note, April 8.
Bock, Matthew J. (2014). Income Inequality in ASEAN: Perceptions on Regional Stability from Indonesia and the Philippines. ASEAN-Canada Research Partnership, Working Paper No.1, April 2014.
Bureau for Development Policy. (2013). Humanity Divided: Confronting Inequality in Developing Countries, United Nations Development Programme (UNDP).
Canavire-Bacarreza, Gustavo dan Rioja, Felix. (2008). Financial Development and the Distribution of Income in Latin America and the Caribbean. The Institute for labor Study (IZA). Discussion Paper No.3796, October 2008.
Clarke, George, Xu, Lixin Colin, dan Zou, Heng-fu. (2003). Finance and Income Inequality: Test of Alternative Theories. The World Bank. Policy Research Working Paper No.2984, March 2003.
Davis, Gerald F. dan Kim, Suntae. (2015). Financialization of the Economy. Draft Chapter for Annual Review of Sociology. January 13.
Demirguc-Kunt, Asli dan Levine, Ross. (2009). Finance and Inequality: Theory and Evidence.
National Bureau of Economic Research (NBER), Working Paper No. 15275. August 2009.
Singapore Department of Statistics. (2016). diakses Desember 2016. http://www.singstat.gov.sg/statistics
Department of Economic and Social Affairs. (2013). Inequality Matters: Report of the World Social Situation, United Nations.
Dollar, David dan Kraay, Aart. (2002). Growth is Good for the Poor. Journal of Economic Growth. September 2002. 7(3); hal. 195-225.
Dore, R., (2000). Stock Market Capitalism: Welfare Capitalism: Japan and Germany versus the Anglo-Saxons. Oxford University Press, 2000. Dikutip oleh Michal Falkowski. (2011). “Financialization of Commodities’. Journal of Contemporary Economics. Vol.5 (4),hal 4-17.
Dunhaupt, Petra. (2010). Financialization and the Rentier Income Share: Evidence from the USA and Germany. Macroeconomic Policy Institute, Working Paper No.2/2010. February 9.
Dunhaupt, Petra. (2014). An Empirical Assessment of the Contribution of Financialization and Corporate Governance to the Rise in Income Inequality. Institute for International Political Economy Berlin, Working Paper No.41.
Economic Planning Unit of Malaysia. (2016). diakses Desember 2016, http://www.epu.gov.my/en/home
Gerald A. Epstein. (2005). Financialization and the World Economy. Edward Elgar.
Giovanni Arrighi. (2010). The Long Twentieth Century. Verso. ILO. (2016). Key Indicators of Labor Market, diakses Desember 2016, http://www.ilo.org/global/statistics-and-databases/research-and-databases/kilm/lang--en/index.htm
ILO. (2016). Global Wage Database, diakses Desember 2016, http://www.ilo.org/global/research/global-reports/global-wage-report/2014/lang--en/index.htm
Jauch, Sebastian dan Watzka, Sebastian. (2012). Financial Development and Income Inequality: A Panel Data Approach. CESifo Working Paper No. 3687. October 2012.
Kraay, Aart, Dollar, David, dan Kleineberg, Tatjana. (2014). Growth, Inequality, and Social Welfare: Cross-Country Evidence. Makalah dipresentasikan dalam Sixtieth Panel Meeting on Economic Policy, the Einaudi Institute for Economics and Finance (EIEF). Rome. 24-25 October 2014.
Kappel, Vivien. (2010). The Effects of Financial Development on Income Inequality and Poverty. Swiss Federal Institute of Technology Zurich, Economics Working Paper No. 10/27. March, 29.
Krippner, Greta R. (2005). The Financialization of the American Economy. Socio-Economic Review. Vol.3, hal. 173-208.
Kus, Busak. (2012). Financialization and Income Inequality in OECD Nations: 1995-2007. The Economic and Social Review, Winter 2012. Vol. 43(4), hal. 477-495.
Lin, Ken-Hou dan Tomaskovic-Devey, Donald. (2013). Financialization and U.S. Income Inequality: 1970-2008. American Journal of Sociology, March. Vol. 118(5), hal. 1284-1329.
National Statistical Office of Thailand. (2016). diakses Desember 2016, http://web.nso.go.th/.
Palley, Thomas I. (2016). The Macroeconomics of Financialization: A Stages of Development Approach. Presented at the 5th International Conference, Developments in Economic Theory and Policy. held in Bilbao, Spain, July 10 and 11, 2008.
Park, Cyn-Young dan Mercado Jr, Rogelio V. (2015). Financial Inclusion, Poverty, and Income Inequality in Developing Asia. Asian Development Bank (ADB), Economics Working Paper No.426. January 2015.
Park, Donghyun dan Shin, Kwanho. (2015). Economic Growth, Financial Development, and Income Inequality. Asian Development Bank (ADB), Economics Working Paper No.441. August 2015.
Philippine Statistics Authority. (2016). diakses Desember 2016, http://psa.gov.ph/
Roodman, David. (2006). How to Do xtabond2: An Introduction to “Difference” and “System”
GMM in Stata. Center for Global Development, Working Paper No.103. December 2006.
Stockhammer, Engelbart. (2010). Financialization and the Global Economy. Political Economy Research Institute, Working Paper No.240. 13 October 2010.
The World Bank. (2016). World Development Indicators, diakses Desember 2016, http://data.worldbank.org/data-catalog/world-development-indicators
The World Bank. (2016). Global Financial Development Database, diakses Desember 2016, http://data.worldbank.org/data-catalog/global-financial-development
United Nations University. (2016). World Income Inequality Database, diakses Desember 2016, https://www.wider.unu.edu/project/wiid-world-income-inequality-database
William H. Greene. (2003). Econometric Analysis. Prentice Hall. New Jersey.
Published
2017-03-30
How to Cite
Buhaerah, P. (2017). IMPACT OF FINANCING TO THE INCOME INEQUALITY IN ASEAN: DATA PANEL ANALYSIS. Buletin Ekonomi Moneter Dan Perbankan, 19(3), 335-352. https://doi.org/10.21098/bemp.v19i3.669
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Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
