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Financial Development and Income Inequality: Evidence from African Countries in the Franc Zone
Faculty of Economics and Applied Management, University of Douala, Douala, Cameroon
Faculty of Economics and Applied Management, University of Douala, Douala, Cameroon
- 1 Faculty of Economics and Applied Management, University of Douala, Douala, Cameroon
- 2 Faculty of Economics and Applied Management, University of Douala, Douala, Cameroon
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Abstract
The aim of this article is to evaluate the effect of financial development on income inequality in a sample of African countries of the Franc Zone. Using data from Worldwide Governance indicators, UNESCO, COBAC, the Banking Commission of West African States and the World Bank, based on cylindrical dynamic panel whose instrumentalisation and stationarity of variables enabled us to use GMM in system, the results show that financial development through its components which are credit to the private sector, network development as well as the monetary mass significantly reduce income inequality among households. This result is robust by alternative or dual use of the components as well as when several control variables are integrated.
KeywordsFinancial DevelopmentIncome Inequality
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