Finance and Inequality: Exploring Pro-Poor Investment Channels in Africa

African Governance and Development Institute WP/11/016

31 Pages Posted: 9 Sep 2014

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Date Written: December 1, 2011

Abstract

Hitherto very few studies on the inequality-finance (investment) nexus have focused on the African continent owing to lack of relevant data. This paper integrates previously missing investment and financial components in the assessment of how finance affects pro-poor investment channels. Findings reveal, but for the case of foreign investment, financial development dynamics of depth, efficiency, activity and size have an equalizing effect on income distribution through private, public and domestic investment channels. As a policy implication investment-targeted financial reforms that aim to curb poverty should take account of the disequalizing income-effect of foreign investment in undeveloped countries.

Keywords: Finance; Investment; Poverty; Inequality; Africa

JEL Classification: D60; E25; G20; I30; O55

Suggested Citation

Asongu, Simplice, Finance and Inequality: Exploring Pro-Poor Investment Channels in Africa (December 1, 2011). African Governance and Development Institute WP/11/016. Available at SSRN: https://ssrn.com/abstract=2493156 or http://dx.doi.org/10.2139/ssrn.2493156

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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