Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71409
Authors: 
Sun, Puyang
Sen, Somnath
Jin, Shujing
Year of Publication: 
2013
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 7 [Issue:] 2013-12 [Pages:] 1-28
Abstract: 
This paper provides compelling evidence that equity market liberalization, as the most efficient way to smooth financial market frictions such as credit constraints, can alleviate persistent cross-dynastic income inequality by promoting increased human capital accumulation. The authors examine the effect of equity market liberalization on inequality by using data from 72 countries for 1980-2006. Their measured effect is robust to alternative measures of equity market liberalization. Finally, the authors show that foreign equity flows benefit initially less-active stock markets more than the active ones, providing evidence that foreign equity flows act as a substitute for domestic financial markets. This finding emphasizes the possibility of reducing inequality and poverty through equity market liberalization.
Subjects: 
income inequality
equity market liberalization
human capital
economic growth
JEL: 
F41
O16
O15
O11
G0
F36
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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