Financial development, income inequality, and institutional quality: A multi-dimensional analysis

Figures & data

Table 1. Summary statistics

Variables	Definitions and measurements	Mean	St.var	Min	Max	Obs
GINI	Gini (estimated number) from SWIID	38.049	5.057	26.3	50.6	560
OFD	Overall financial development (estimated #)	0.355	0.213	0.035	0.901	600
FI	Financial institutions development	0.387	0.190	0.068	0.932	600
FM	financial markets development	0.313	0.262	0.0002	0.896	600
FID	Financial institutions depth	0.239	0.242	0.008	0.905	600
FIA	Financial institutions access	0.289	0.226	0.016	1	600
FIE	Financial institutions efficiency	0.643	0.116	0.016	0.804	600
FMD	Financial markets depth	0.297	0.273	0.0004	0.927	600
FMA	Financial markets access	0.279	0.249	0.000	1	600
FME	Financial markets efficiency	0.354	0.373	0.000	1	600
IQ	Institutional quality (estimated number)	−0.300	0.730	−1.994	1.639	570
OPEN	Trade openness (% GDP)	91.363	66.400	0.167	437.327	576
INF	Inflation, CPI (%)	5.712	6.225	−18.109	57.075	578
EDU	School enrolment, tertiary (% gross)	32.045	21.993	2.379	104.278	548
LAND	Land per person (hectare)	0.102	0.162	0.0001	1.029	552
EMP	Employment in services to total (%)	46.957	17.850	13.817	83.451	570

Table 2. Estimation results for Eq. (1)(1) $GIN{I}_{it}={\alpha }_0+{\alpha }_{1}F{D}_{it}+{\alpha }_{2}I{Q}_{it}+{\alpha }_{3}F{D}_{it}\ast I{Q}_{it}+X_{it}{\beta }_j+{\epsilon }_{it}$(1) by FGLS and SGMM estimators

Dependent variables: GINI
Regressors	(1)		(2)		(3)
	FGLS	SGMM	FGLS	SGMM	FGLS	SGMM
GINI (−1)		0.981*** (9.43)		0.977*** (8.65)		0.928*** (5.05)
OFD	3.135** (2.11)	2.514* (1.92)
FI			−5.403** (2.08)	−4.864** (2.13)
FM			6.246*** (3.54)	5.347** (2.34)
FID					3.678** (2.25)	2.971** (1.98)
FIA					−3.749** (2.19)	−3.247** (2.04)
FIE					−6.567** (2.30)	−5.141** (2.16)
FMD					5.321*** (3.66)	4.184** (2.37)
FMA					−2.236** (2.17)	−2.695** (2.09)
FME					1.152 (1.38)	1.696 (1.31)
IQ	−4.122*** (4.49)	−3.094** (2.25)	−5.436*** (5.49)	−4.496** (2.18)	−5.338** (2.16)	−4.560** (2.32)
OFD*IQ	−14.072*** (9.16)	−9.822** (2.41)
FI*IQ			−12.422*** (4.65)	−10.462** (2.33)
FM*IQ			−5.653** (2.32)	−5.101*** (3.16)
FID*IQ					−3.850** (2.13)	−3.732** (1.98)
FIA*IQ					−16.193*** (7.23)	−13.616** (2.35)
FIE*IQ					−12.155*** (3.47)	−8.197*** (3.04)
FMD*IQ					−7.673*** (2.96)	−6.228** (2.25)
FMA*IQ					−10.699*** (5.68)	−7.028** (2.36)
FME*IQ					−5.101*** (3.67)	−4.926** (2.33)
OPEN	0.067** (2.14)	0.046*** (3.59)	0.079*** (3.41)	0.056*** (2.61)	0.062*** (5.12)	0.051** (2.24)
INF	0.079* (1.86)	0.052* (1.91)	0.046 (1.55)	0.058* (1.83)	0.037* (1.78)	0.045* (1.81)
EDU	−0.071*** (4.66)	−0.044** (2.55)	−0.077*** (2.92)	−0.056*** (2.75)	−0.083*** (4.56)	−0.065** (2.31)
LAND	−14.369*** (9.46)	−11.782** (2.59)	−14.714*** (9.78)	−10.946* (1.89)	−18.691*** (9.39)	−12.890** (2.13)
EMP	−0.064*** (3.04)	−0.057*** (4.09)	−0.070** (2.35)	−0.052*** (3.51)	−0.056*** (2.78)	−0.062** (2.32)
Year dummies	Yes	Yes	Yes	Yes	Yes	Yes
Constant	42.439***	37.218***	44.106***	40.184***	52.551***	39.115***
Obs	437	418	437	418	437	418
AR(1)-P		0.019		0.011		0.041
AR(2)-P		0.399		0.556		0.254
Sargan-P		0.513		0.488		0.673

Notes: Absolute T-statistics appear in brackets. ***, ** and * denote significance at 1%, 5%, and 10%, respectively. AR(1)-P: P-value of first-order correlation. AR(2)-P: P-value of second-order correlation. Sargan-P: P-value of Sargan test.