Financial Deepening and Income Inequality in Nigeria: Evidence from Zivot-Andrews and Gregory-Hansen Structural Break Analyses
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Adeleye, Bosede Ngozi [4] ; Nathaniel, Solomon [1] ; Ogunrinola, Ifeoluwa [2] ; Ikuemonisan, Edamisan [3]
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[1] University of Lagos
University of Lagos
Nigeria
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[2] Covenant University
Covenant University
Nigeria
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[3] Adekunle Ajasin University
Adekunle Ajasin University
Nigeria
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[4] Department of Economics and Development Studies, Covenant University, Nigeria Regional Centre of Expertise (RCE) Ogun, Nigeria Centre for Economic Policy and Development Research (CEPDeR), Covenant University, Nigeria
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- Localización: Estudios de economía aplicada, ISSN 1133-3197, ISSN-e 1697-5731, Vol. 39, Nº 8, 2021 (Ejemplar dedicado a: Sustainable Economic Development: Pattern and Perspective)
- Idioma: inglés
- Texto completo no disponible (Saber más ...)
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Resumen
Aligning with the Sustainable Development Goal (SDG) 10 agenda, this paper undertakes a structural break analysis on the effects of financial deepening on income inequality in Nigeria using annual data from 1980 to 2015 and error correction approach within the framework of the autoregressive distributed lags (ARDL) model. Major findings are as follows: (1) in the long-run, financial deepening and per capita income have equalising impact on income inequality; (2) an equalising effect of financial deepening is observed at the turn of a break point; (3) surprisingly, in the short-run, financial deepening aggravates inequality, and (4) the equalising effects of these variables are robust to the choice of financial deepening variables, the different structural break points and model specifications. These results suggest that income inequality depends on financial deepening and per capita income and that not controlling for structural breaks may lead to wrong inferences when making decisions on issues related to reducing income inequality in Nigeria.
