Credit - Inequality Nexus: the Role of Natural Resources

• Autorzy: Margaret Rutendo Magwedere

Warianty tytułu

Powiązanie kredytów i nierówności: rola zasobów naturalnych

• Języki publikacji: EN

Abstrakty

EN

This article offers a contribution to the understanding of the links between credit, inequality and natural resources, using panel data from 2002 to 2021 for 31 countries. A system-generalised method of moments was employed to determine the dynamic relationship between the variables of the study. The findings of the study suggest inequality and natural resources have a negative and significant relationship with credit. Higher inequality levels and natural resources rents are associated with a lower ratio of private credit to gross domestic product. The study offers an insight into the three pillars of sustainability, namely economic, social and environmental. It is essential for policymakers to integrate environmental factors such as natural resources in the relationships between inequality and the financial sector.(original abstract)

Niniejszy artykuł stanowi wkład w zrozumienie powiązań między kredytami, nierównościami i zasobami naturalnymi, wykorzystując dane panelowe z lat 2002-2021 dla 31 krajów. Zastosowano uogólnioną metodę momentów w celu określenia dynamicznej relacji między zmiennymi badania. Wyniki badania sugerują, że nierówności i zasoby naturalne mają negatywny i znaczący związek z kredytem. Wyższe poziomy nierówności i renty z zasobów naturalnych wiążą się z niższym stosunkiem kredytów prywatnych do produktu krajowego brutto. Badanie oferuje wgląd w trzy filary zrównoważonego rozwoju, a mianowicie gospodarczy, społeczny i środowiskowy. Istotne jest, aby decydenci polityczni uwzględnili czynniki środowiskowe, takie jak zasoby naturalne, w relacjach między nierównościami a sektorem finansowym. (abstrakt oryginalny)

Słowa kluczowe

EN

Credit; Panel data; Natural resources

PL

Kredyt; Dane panelowe; Zasoby naturalne

• Czasopismo: Ekonomia i Środowisko
• Rocznik: 2023
• Numer: nr 3 (86)
• Strony: 508--526

Twórcy

autor

Margaret Rutendo Magwedere

• University of South Africa, Pretoria, South Africa

Bibliografia

• Altunbaş, Y., & Thornton, J. (2020). Finance and income inequality revisited. Finance Research Letters, 37, 101355. https://doi.org/10.1016/j.frl.2019.101355
• Andersen, J. J., Johannesen, N., Lassen, D. D., & Paltseva, E. (2017). Petro rents, political institutions, and hidden wealth: Evidence from offshore bank accounts. Journal of the European Economic Association, 15(4), 818-860.
• Arellano, M. (2003). Panel Data Econometrics. New York: Oxford University Press.
• Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297.
• Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29-51. https://doi.org/10.1016/0304-4076(94)01642-D
• Asongu, S. A., & De Moor, L. (2017). Financial globalisation dynamic thresholds for financial development: evidence from Africa. The European Journal of Development Research, 29(1), 192-212. https://doi.org/10.1057/ejdr.2016.10
• Asongu, S. A., & Odhiambo, N. M. (2020). Insurance policy thresholds for economic growth in Africa. The European Journal of Development Research, 32(3), 672-689. https://doi.org/10.1057/s41287-019-00234-2
• Banerjee, A. V., & Newman, A. F. (1993). Occupational choice and the process of development. Journal of Political Economy, 101(2), 274-298. http://www.jstor.org/stable/2138820
• Bazillier, R., & Hericourt, J. (2017). The Circular Relationship between inequality, Leverage and Financial Crisis. Journal of Economic Surveys, 31(2), 463-496. https://doi.org/10.1111/joes.12150
• Beck, T. (2012). Finance and oil: is there a resource curse? In N.Sy. Amadou, R. Arezki & T. Gylfason (Eds.), Beyond the curse: Policies to harness the power of natural resources (pp. 81-106). Washington, DC: International Monetary Fund. https://doi.org/10.5089/9781616351458.071
• Beck, T., & Poelhekke, S. (2022). Follow the money: Does the financial sector intermediate natural resource windfalls? Journal of International Money and Finance, 130, 102769. https://doi.org/10.1016/j.jimonfin.2022.102769
• Bhattacharyya, S., & Hodler, R. (2014). Do natural resource revenues hinder financial development? The role of political institutions. World Development, 57, 101-113. https://doi.org/10.1016/j.worlddev.2013.12.003
• Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143. https://doi.org/10.1016/S0304-4076(98)00009-8
• Boateng, G. O., Neilands, T. B., Frongillo, E. A., Melgar-Quiñonez, H. R., & Young, S. L. (2018). Best practices for developing and validating scales for health, social, and behavioral research: a primer. Frontiers in Public Health, 6, 149. https://doi.org/10.3389/fpubh.2018.00149
• Bond, G., Kromer, B., Beer, J., Muscheler, R., Evans, M. N., Showers, W., Hoffmann, S., Lotti-Bond, R., Hajdas, I., & Bonani, G. (2001). Persistent solar influence on North Atlantic climate during the Holocene. Science, 294(5549), 2130-2136. https://doi.org/10.1126/science.1065680
• Bordo, M. D., & Meissner, C. M. (2012). Does inequality lead to a financial crisis? Journal of International Money and Finance, 31(8), 2147-2161. https://doi.org/10.1016/j.jimonfin.2012.05.006
• Botta, A., Caverzasi, E., Russo, A., Gallegati, M., & Stiglitz, J. E. (2021). Inequality and finance in a rent economy. Journal of Economic Behavior & Organization, 183, 998-1029. https://doi.org/10.1016/j.jebo.2019.02.013
• Bruno, G., De Bonis, R., & Silvestrini, A. (2012). Do financial systems converge? New evidence from financial assets in OECD countries. Journal of Comparative Economics, 40(1), 141-155. https://doi.org/10.1016/j.jce.2011.09.003
• Cardaci, A. (2018). Inequality, household debt and financial instability: An agent-based perspective. Journal of Economic Behaviour & Organization, 149, 434-458. https://doi.org/10.1016/j.jebo.2018.01.010
• Cardaci, A., & Saraceno, F. (2019). Between scylla and charybdis: income distribution, consumer credit, and business cycles. Economic Inquiry, 57(2), 953-971. https://doi.org/10.1111/ecin.12749
• Carmignani, F. (2013). Development outcomes, resource abundance, and the transmission through inequality. Resource and Energy Economics, 35(3), 412-428. https://doi.org/10.1016/j.reseneeco.2013.04.007
• Carroll, C. (2000). Why do the rich save so much? NBER Working Paper, w6549, 1-32.
• De Hoyos, R. E., & Sarafidis, V. (2006). Testing for cross-sectional dependence in panel-data models. The Stata Journal, 6(4), 482-496.
• Delis, M. D., Fringuellotti, F., & Ongena, S. (2021). Credit, income and inequality. https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr929.pdf
• Demirgüç-Kunt, A., & Levine, R. (2009). Finance and inequality: Theory and evidence. Annu. Rev. Financ. Econ., 1(1), 287-318.
• Dwumfour, R. A., & Ntow-Gyamfi, M. (2018). Natural resources, financial development and institutional quality in Africa: is there a resource curse? Resources Policy, 59, 411-426. https://doi.org/10.1016/j.resourpol.2018.08.012
• Ferri, G., Murro, P., Peruzzi, V., & Rotondi, Z. (2019). Bank lending technologies and credit availability in Europe: What can we learn from the crisis? Journal of International Money and Finance, 95, 128-148. https://doi.org/10.1016/j.jimonfin.2019.04.003
• Fischer, R., Huerta, D., & Valenzuela, P. (2019). The inequality-credit nexus. Journal of International Money and Finance, 91, 105-125. https://doi.org/10.1016/j.jimonfin.2018.11.004
• Fitoussi, J. P., & Saraceno, F. (2010). Europe: How deep is a crisis? Policy responses and structural factors behind diverging performances. Journal of Globalization and development, 1(1), 1-19. https://doi.org/10.2202/1948-1837.1053
• Fitoussi, J. P., & Stiglitz, J. (2009). The ways out of the crisis and the building of a more cohesive world. https://www.ofce.sciences-po.fr/pdf/dtravail/WP2009-17.pdf
• Frank, R. H. (2005). Positional externalities cause large and preventable welfare losses. American Economic Review, 95(2), 137-141. https://doi.org/10.1257/000282805774670392
• Galor, O., & Zeira, J. (1993). Income distribution and macroeconomics. The Review of Economic Studies, 60(1), 35-52. https://doi.org/10.2307/2297811
• Gujarati, D. N. (2022). Basic Econometrics. Prentice Hall.
• Han, J., Raghutla, C., Chittedi, K. R., Tan, Z., & Koondhar, M. A. (2022). How natural resources affect financial development? Fresh evidence from top-10 natural resource abundant countries. Resources Policy, 76(48), 102647. https://doi.org/10.1016/j.resourpol.2022.102647
• Hansen, L. P. (1982). Large sample properties of generalized method of moments estimators. Econometrica: Journal of the Econometric Society, 50(4), 1029-1054. https://doi.org/10.2307/1912775
• Iacoviello, M. (2008). Household debt and income inequality, 1963-2003. Journal of Money, Credit and Banking, 40(5), 929-965. https://doi.org/10.1111/j.1538-4616.2008.00142.x
• Ioannidou, V., Pavanini, N., & Peng, Y. (2022). Collateral and asymmetric information in lending markets. Journal of Financial Economics, 144(1), 93-121. https://doi.org/10.1016/j.jfineco.2021.12.010
• Jordà, Ò., Schularick, M., & Taylor, A. M. (2016). The great mortgaging: housing finance, crises and business cycles. Economic Policy, 31(85), 107-152. https://doi.org/10.1093/epolic/eiv017
• Kearney, M., & Levine, P. (2016). Income inequality, social mobility, the decision to drop out of high school. In J.C. Eberly & J.H. Stock (Eds.), Brookings Papers on Economic Activity (pp. 333-380). Washington, DC: Brookings Institution. http://www.brookings.edu/about/projects/bpea/papers/2016/kearney-levine-inequality-mobility
• Klein, M. (2015). Inequality and household debt: a panel cointegration analysis. Empirica, 42(2), 391-412. https://doi.org/10.1007/s10663-015-9281-7
• Kumhof, M. M., & Ranciere, M. R. (2010). Inequality, leverage and crises. Washington, DC: International Monetary Fund.
• Kumhof, M., Rancière, R., & Winant, P. (2015). Inequality, leverage, and crises. American Economic Review, 105(3), 1217-1245. https://doi.org/10.1257/aer.20110683
• Levine, R. (2005). Finance and Growth: Theory and Evidence. Handbook of Economic Growth, 1, 865-934. https://doi.org/10.1016/S1574-0684(05)01012-9
• Magwedere, M. R., & Marozva, G. (2022). Financial Stability and Income Inequality in Developing Countries. Prague Economic Papers, 31(6), 464-481. https://doi.org/10.18267/j.pep.815
• Magwedere, M. R., & Marozva, G. (2023). Household debt, inequality, and financial stability nexus. International Journal of Monetary Economics and Finance, 16(2), 139-156.
• Malinen, T. (2016). Does income inequality contribute to credit cycles? The Journal of Economic Inequality, 14(3), 309-325. https://doi.org/10.1007/s10888-016-9334-6
• Mansoorian, A. (1991). Resource discoveries and excessive external borrowing. The Economic Journal, 101(409), 1497-1509.
• Manzano, O., & Rigobon, R. (2007). Resource curse or debt overhang. In D. Lederman & W.F. Maloney (Eds.), Natural Resources: Neither Curse nor Destiny (pp. 41-70). Washington, DC: World Bank.
• Mian, A., Sufi, A., & Verner, E. (2017). Household debt and business cycles worldwide. The Quarterly Journal of Economics, 132(4), 1755-1817. https://doi.org/10.1093/qje/qjx017
• Murphy, K. M., Shleifer, A., & Vishny, R. W. (1993). Why is rent-seeking so costly to growth? The American Economic Review, 83(2), 409-414.
• Odhiambo, N. M. (2020). Financial development, income inequality and carbon emissions in Sub-Saharan African countries: a panel data analysis. Energy Exploration & Exploitation, 38(5), 1914-1931. https://doi.org/10.1177/0144598720941999
• Pesaran, M. H. (2021). General diagnostic tests for cross-sectional dependence in panels. Empirical Economics, 60(1), 13-50. https://doi.org/10.1007/s00181-020-01875-7
• Piketty, T., & Saez, E. (2013). A theory of optimal inheritance taxation. Econometrica, 81(5), 1851-1886. https://doi.org/10.3982/ECTA10712
• Pouokam, N. (2021). Sharing Resource Wealth Inclusively Within and Across Generations. Washington, DC: International Monetary Fund.
• Rajan, R. G. (2010). Fault lines. How hidden fractures still threaten the world economy. New Jersey: Princeton University Press.
• Rewilak, J. (2017). The role of financial development in poverty reduction. Review of Development Finance, 7(2), 169-176. https://doi.org/10.1016/j.rdf.2017.10.001
• Roodman, D. (2009). How to do xtabond2: An introduction to difference and system GMM in Stata. The Stata Journal, 9(1), 86-136. https://doi.org/10.1177/1536867X0900900106
• Sachs, J. D., & Warner, A. M. (1997). Sources of slow growth in African economies. Journal of African Economies, 6(3), 335-376. https://doi.org/10.1093/oxfordjournals.jae.a020932
• Sargan, J. D. (1958). The estimation of economic relationships using instrumental variables. Econometrica, 26(3), 393-415. https://doi.org/10.2307/1907619
• Schularick, M., & Taylor, A. M. (2012). Credit booms gone bust: Monetary policy, leverage cycles and financial crises. American Economic Review, 102, 1029-1061. https://doi.org/10.1257/aer.102.2.1029
• Siddiqui, Sh. A., Zannou, O., Karim, I., Kasmiati, K., Awad, N. M. H., Gołaszewski, J., Heinz, V., & Smetana, S. (2022). Avoiding Food Neophobia and Increasing Consumer Acceptance of New Food Trends-A Decade of Research. Sustainability, 14(16), 10391. https://doi.org/10.3390/su141610391
• Solt, F. (2020). Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database. Social Science Quarterly, 101(3), 1183-1199, https://doi.org/10.1111/ssqu.12795
• Stiglitz, J. E. (2009). The Current Economic Crisis and Lessons for Economic Theory. Eastern Economic Journal, 35(3), 281-298. https://doi.org/10.1057/eej.2009.24
• Stiglitz, J. E. (2012). Macroeconomic fluctuations, inequality, and human development. Journal of Human Development and Capabilities, 13(1), 31-58. https://doi.org/10.1080/19452829.2011.643098
• Stiglitz, J. E. (2016). New theoretical perspectives on the distribution of income and wealth among individuals. In K. Basu & J.E. Stiglitz (Eds.), Inequality and growth: Patterns and policy (pp. 1-71). London: Palgrave Macmillan.
• Stockhammer, E. (2015). Rising inequality as a cause of the present crisis. Cambridge Journal of Economics, 39(3), 935-958.
• Torvik, R. (2002). Natural resources, rent-seeking and welfare. Journal of Development Economics, 67(2), 455-470.
• United Nations. (2015). Transforming our world: the 2030. Agenda for Sustainable Development. https://sdgs.un.org/2030agenda
• Van der Ploeg, F. (2011). Natural resources: curse or blessing? Journal of Economic Literature, 49(2), 366-420. https://doi.org/10.1257/jel.49.2.366
• Van der Ploeg, F., & Poelhekke, S. (2009). Volatility and The Natural Resource Curse. Oxford Economic Papers, 61(4), 727-760.
• Van der Ploeg, R., & Venables, A. J. (2012). Natural Resource Wealth: The Challenge of Managing a Windfall. Annual Review of Economics, 4, 315-337. http://dx.doi.org/10.1146/annurev-economics-080511-111003
• Venables, A. J. (2016). Using natural resources for development: why has it proven so difficult? Journal of Economic Perspectives, 30(1), 161-184. https://doi.org/10.1257/jep.30.1.161
• Windmeijer, F. (2005). A Finite Sample Correction for the Variance of Linear Efficient Two-Step GMM Estimators. Journal of Econometrics, 126, 25-51. http://dx.doi.org/10.1016/j.jeconom.2004.02.005
• World Development Indicators. (2023). Data Bank. https://databank.worldbank.org/source/world-development-indicators
• World Governance Indicators. (2023). Data Bank. https://databank.worldbank.org/source/worldwide-governance-indicators
• Zhang, R., & Naceur, S. B. (2019). Financial development, inequality, and poverty: Some international evidence. International Review of Economics & Finance, 61, 1-16. https://doi.org/10.1016/j.iref.2018.12.015

Identyfikatory

DOI

10.34659/eis.2023.86.3.646