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Samouel Beji
 
''Financial Openness and Income Inequality: Do Institutions matter for Africa?''
( 2019, Vol. 39 No.1 )
 
 
There has been little empirical literature on the relationship between financial openness and income inequality in Africa. Using a panel threshold estimation technique we examine whether the effect of financial openness on income inequality is dependent to the institutional quality. We adopt the methodology proposed by Hansen (1999) on a panel dataset of 21 African countries over the period 1985-2014. Our results confirm the existence of a two-regime split. In fact, financial openness seems to significantly widen the income inequality in countries with low level of institutional quality while it does not have a significant effect in countries with relatively high institutional quality. These results concur with a well-established literature and demonstrate that financial openness-income inequality link is contingent on the quality of the political and institutional environment in the African countries.
 
 
Keywords: Financial Openness, Income Inequality, Threshold Panel Regression
JEL: F3 - International Finance: General
F4 - Macroeconomic Aspects of International Trade and Finance: General
 
Manuscript Received : Dec 20 2018 Manuscript Accepted : Jan 13 2019

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