Effects of Country and Geopolitical Risks on Income Inequality: Evidence from Emerging Economies


Wu W., Wang L., ERZURUMLU Y. Ö. , GÖZGÖR G. , Yang G.

EMERGING MARKETS FINANCE AND TRADE, 2022 (Journal Indexed in SSCI) identifier

  • Publication Type: Article / Article
  • Publication Date: 2022
  • Doi Number: 10.1080/1540496x.2022.2070002
  • Title of Journal : EMERGING MARKETS FINANCE AND TRADE
  • Keywords: Country risks, financial risks, geopolitical risks, political risks, income inequality, emerging markets, FINANCIAL DEVELOPMENT, POLICY UNCERTAINTY, IMPACT, PANEL, GLOBALIZATION, DETERMINANTS, VOLATILITY, GROWTH, NEXUS

Abstract

Income inequality is rising due to the risks and uncertainties related to the COVID-19 pandemic and other risks. This paper examines the effects of country risks (measured by economic/financial and political risks) and geopolitical risks on the income inequality in the panel dataset of 19 emerging market economies from 1985 to 2020. It is observed that all risk measures are positively related to income inequality. This evidence is also valid when different empirical models and estimation procedures are considered. The results are also robust for including various controls, excluding the extreme observations in the dataset, and considering the countries at the different income levels and regions.