THE FINANCIAL DEVELOPMENT AND POVERTY NEXUS: The Role of the Institutions

This study contributes to the literature by providing an interactive impact of financial development and institutions on poverty for a panel of 35 developed and 79 developing countries over the period 1984-2013 using two-stage least squares, system generalized method of moments, and simultaneous equ...

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Bibliographic Details
Published in:Pakistan journal of applied economics 2021-06, Vol.31 No.1 (Summer 2021), p.47-75
Main Authors: Muhammad Tariq MAJEED, Iram SHEHZADI, Hafiz Muhammad Abubakar SIDDIQUE
Format: Article
Language:English
Subjects:
financial development
institutions
poverty
system gmm
Online Access:Get full text
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Summary:This study contributes to the literature by providing an interactive impact of financial development and institutions on poverty for a panel of 35 developed and 79 developing countries over the period 1984-2013 using two-stage least squares, system generalized method of moments, and simultaneous equations approach. The results show that financial development and institutions mitigate poverty, with the latter being more efficient than the former. The institutions strengthen the ability of the financial system to alleviate poverty. Further, the empirics state that both access (outreach) and depth (credit extension) of the financial sector matter for poverty reduction.
ISSN:0254-9204
2519-0431